Applying Altman's Z-Score in the Classroom

Arnold, Tom; Earl, John H.

doi:10.2139/ssrn.751164

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Applying Altman's Z-Score in the Classroom

11 Pages Posted: 3 Jul 2005

See all articles by Tom Arnold

Tom Arnold

University of Richmond - E. Claiborne Robins School of Business

John H. Earl

University of Richmond - E. Claiborne Robins School of Business

Date Written: June 15, 2005

Abstract

Altman's Z-score is introduced in an Excel framework to produce a quick calculation of the Z-score with actual financial data available through the Internet. The lesson plan developed is easily introduced with topics concerning ratio analysis, financial risk, bond rating changes, and bankruptcy. Given the wide use of the Z-score in practice to evaluate credit risk (or bankruptcy risk), the lesson plan produces a skill set that is very marketable.

Keywords: Z-Score, bankruptcy, pedogogy, excel, ratio analysis

JEL Classification: G30, G33, A0

Suggested Citation: Suggested Citation

Arnold, Thomas M. and Earl, John H., Applying Altman's Z-Score in the Classroom (June 15, 2005). Available at SSRN: https://ssrn.com/abstract=751164 or http://dx.doi.org/10.2139/ssrn.751164