The Altman Z score formula is used in predicting bankruptcy up to two years in advance.
The screen identifies companies with an Altman Z score above 3 as it is deemed safe if the Z score is above 2.6.
Altman Z Score = 1.2*X1 + 1.4*X2 + 3.3*X3 + 0.6*X4 + 1.0*X5
Read more: Altman Z score screener backtest
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