ALTMAN’S Z-SCORE MODEL OF ANALYSIS.

Every year in the United States approximately 1% of all companies declare bankruptcy. As a result of an attempt to define the factors that lead to a company’s bankruptcy, there have been a large number of scientific papers dealing with this problem over the last few decades. A number of techniques and models for business failure prediction have also been developed in order to implement preventive measures to avoid the negative consequences of failure at the level of companies and the economy as a whole. In this context, Altman’s model is the most popular model in this area in the world. It has served as the inspiration and basis for a number of authors to develop their own models of analysis using the same statistical techniques. This paper presents the most popular model for the prediction of business failures of companies, the so-called Altman’s model of analysis. [ABSTRACT FROM AUTHOR]