ORIGINAL Z-SCORE Definition

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ORIGINAL Z-SCORE (For Public Manufacturer) 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 score between 1.8 and 3.0 is the gray area. Probabilities of bankruptcy within the above ranges are 95% for one year and 70% within two years. Obviously a higher Z-Score is desirable.

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FINANCIAL GUARANTEE INSURANCE is insurance created to cover losses from specified financial transactions.

CURRENT CASH DEBT RATIO measures ability to pay current liabilities in given year with cash derived from operating activities. Calculated using net cash from operating activities divided by average current liabilities.

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