Devised in the 1960s by Edward Altman, a Z score indicates the probability of a company entering bankruptcy within the next two years. The higher the Z score, the lower the probability of bankruptcy. A score above three indicates that bankruptcy is unlikely; a score below 1.8 indicates that bankruptcy is possible. It works by analysing the financial strength of a company using five balance-sheet and profit-and-loss-account measures profit to total assets, retained earnings to total assets, working capital to total assets, sales to total assets and market capitalisation to total assets. These are then weighted to reflect their relative importance before being combined into a single figure, the Z score.
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Reducing cash ISA limit will make lending difficult and expensive, warn providersAn open letter from the Building Societies Association has urged the chancellor to keep the cash ISA limit at £20,000. We look at whether a smaller cash ISA allowance will make it harder to get a mortgage or loan
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Nvidia becomes world's first $4 trillion companyThe AI boom has catapulted Nvidia’s share price to astronomic heights, becoming the world’s most valuable company and the first to pass the $4 trillion milestone
