PREDICTOR RATIOS Definition

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PREDICTOR RATIOS: Most ratios are descriptive in nature; that is, they describe the firm as it is now. As you might expect, Predictor Ratios provide suggestions about likely future conditions for the firm. VentureLine provides two industry standard Predictor Ratios:

  1. Altman Z-Score - a valid predictor or bankruptcy, and,
  2. Sustainable Growth Rate - shows the degree to which a concern can grow using their retained earnings to fund growth.

Learn new Accounting Terms

NEGATIVE DOLLAR is a dollar that is owed to another entity.

FIXED ASSETS (NET) is all property, plant, leasehold improvements and equipment, net of accumulated depreciation or depletion.

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