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+--- Thread: Altman Z-score (/showthread.php?tid=1272)
Altman Z-score - Roadmap2Retire - 07-26-2015
In my continued education of investing methods and metrics, I came across Altman Z-score and looked really interesting. Seems like a great way to quickly judge the overall financial condition of a company.
Out of curiosity, do other DGIs pay attention to this score?
The Altman Z-score
RE: Altman Z-score - navyasw02 - 07-26-2015
Interesting, but I found an article from April saying MAT was a good investment based on its Altman Z-score and that was evidence enough for me to stop looking at this seriously.
RE: Altman Z-score - rapidacid - 07-26-2015
Yes, Altman Z-Score has a 5% weighting in my scoring criteria
![[Image: mL9QfYj.png]](https://i.imgur.com/mL9QfYj.png)
RE: Altman Z-score - Caversham - 07-26-2015
I'm familiar with the ratio, and use it primarily to filter out companies when performing a screen. It looks like rapidacid utilizes this metric similarly.
I've found the metric less useful when seriously analyzing a company. If I've gotten to the "serious analysis" stage, then I will already have a firm conviction that the company is very unlikely to declare bankruptcy.
(07-26-2015, 10:30 AM)navyasw02 Wrote: Interesting, but I found an article from April saying MAT was a good investment based on its Altman Z-score and that was evidence enough for me to stop looking at this seriously.
Isn't this is like saying: "Enron falsified financial statements, so I no longer look at financial statements when analyzing a companies."
RE: Altman Z-score - navyasw02 - 07-26-2015
(07-26-2015, 03:08 PM)Caversham Wrote: I'm familiar with the ratio, and use it primarily to filter out companies when performing a screen. It looks like rapidacid utilizes this metric similarly.
I've found the metric less useful when seriously analyzing a company. If I've gotten to the "serious analysis" stage, then I will already have a firm conviction that the company is very unlikely to declare bankruptcy.
(07-26-2015, 10:30 AM)navyasw02 Wrote: Interesting, but I found an article from April saying MAT was a good investment based on its Altman Z-score and that was evidence enough for me to stop looking at this seriously.
Isn't this is like saying: "Enron falsified financial statements, so I no longer look at financial statements when analyzing a companies."
Not really. One is the illegal fraudulent reporting of source data which drives bad analysis, and the other is misuse of an analytical tool on good data.