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Home Suggestions Perhaps time to replace the Altman Z-score

Perhaps time to replace the Altman Z-score
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12:42 pm
July 24, 2011


darkgreen

San Diego

Member

posts 25
1

I've been thinking about this for a while reading various later papers. 

 

Various researchers have found that the 1968 Altman Z-score has limited predictive power now, and there are later methods.

 

Finally getting unlazy and posting as someone else has done the hard work of putting together the literature: http://tinyurl.com/3d8falj

 

It's worth a read.

 

Also, the scores that rank by "percentile" actually usually aren't too hard to implement. Looking at data from the papers one can see general absolute ranges that represent good and bad signals so one doesn't need to have full market data.

 

Cheers, 

darkgreen
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