SYNOPSIS PRESENTATION ON ALTMAN Z-Scor ANALYSIS.

1. Under the guidance of:
Mr. Smruty Ranjan Sahoo
SYNOPSIS
ON
“Application of Altman Z-Score in Measuring
Financial Distress of a Manufacturing and
Non-Manufacturing Company”
Presented by:-
Faijan Mustafa

2. CONTENTS
 What Is Altman Z- Score
 Altman Z-score Model Formula
 Objective Of The Study
 Research Mythology
 References

3.  What is Altman Z- score model?
 Altman’s Z-score Model is a numerical measurement that
is used to predict the chances of bankruptcy.
 The model was developed by American finance professor
Edward Altman in 1968 as a measure of the financial
stability of companies.
 Altman’s Z-score model combines five financial ratios to
predict the probability of a company becoming insolvent
in the next two years.

4.  Altman’s Z-Score Model Formula:-
For manufacturing industry:-
Z =1.2x1+1.4x2+3.3x3+0.6x4+1x5
For Non-manufacturing industry:-
Z =6.56x1+3.26x2+6.72x3+1.05x4
Where:
Zeta is the Altman’s Z-score
X1 is the Working Capital/Total Assets ratio
X2 is the Retained Earnings/Total Assets ratio
X3 is the Earnings before Interest and Tax/Total Assets
ratio
X4 is the Market Value of Equity/Total Liabilities ratio
X5 is the Total Sales/Total Assets ratio

7.  OBJECTIVE OF THE STUDY:-
To predict the financial health
and viability of the company
using “z” score model.
To analyze the financial condition
of the TATA motors and TCS Ltd.
How Altman z-score find out
solvency of the company.
To know the efficiency in
financial operation of the
company.

8.  RESEARCH METHODOLOGY:-
Primary data: It is a type of
data that is collected by research
directly for main sources.
Secondary data: It is a type of
data that is collected by someone
other than the primary user.
In my research I am use only
secondary data.

9.  REFERENCES:-
 www.researchgate.net/publication
 www.wallstreetprep.com/knowledg
e
 https://scholar.google.com/scholar
 https://corporatefinanceinstitute.co
m/resources/commercial-
lending/altmans-z-score-model
 https://www.google.com/search?q=
z+score+wikipedia&oq=z+score