ALTMAN Z-SCORE reliably predicts whether or not a company is likely to enter into bankruptcy within one or two years: If the Z-Score is 3.0 or above - bankruptcy is not likely. If the Z-Score is 1.8 or less - bankruptcy is likely.A Z-Score between 1.8 and 3.0 is the gray area, i.e., a high degree of caution should be used. Probabilities of bankruptcy within the above ranges are 95% for one year and 70% within two years. A Z-Score between the two is the gray area. Obviously a higher Z-Score is desirable. It is best to assess each individual companys Z-Score against that of the industry. In low margin industries it is possible for Z-Scores to fall below the above. In such cases a trend comparison to the industry over consecutive time periods may be a better indicator. It should be remembered that a Z-Score is only as valid as the data from which it was derived i.e. if a company has altered or falsified their financial records/books, a Z-Score derived from those "cooked books" is of lesser use.
NO-PAR VALUE CAPITAL STOCK are shares designated in the charter that do not have a par or assigned value printed on the issued stock certificate.
COMPUTER CONTROLS are internal controls performed by computer software controls as opposed to manual controls. Can also mean general and application controls over the computer processing of data.
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