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Financial Distress Information could be useful for several users :Problem In Bankruptcy and IndicatorsProblemSome Indicator to predict5

All About Z ScoreZ- Score ?????Z score a multiple discriminant analysis technique, developed as a powerful diagnostic tool measuring solvency with ability to identify bankrupt firms, 12 months in advance, at an accuracy rate of approximately 95%Research :Professor Edward Altman, Stern School of Business, New York University

Z ScoreAltman (1968) built a linear discriminant model based only on financial ratios, matched sample (by year, industry, size)

Z = 1.2 X1 + 1.4 X2 + 3.3 X3 +0.6 X4 + 1.0 X5

X1 = working capital / total assetsX2 = retained earnings / total assetsX3 = earning before interest and taxes / total assetsX4 = market value of equity / book value of total liabilitiesX5 = sales / total assets

multiple discriminant analysis

Tren Perkembangan Z ScoreConclusion :

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