What is the most important factor determining bankruptcy, according to the Altman Z-score model?

Question

Quizplus · Accepted Answer

The Altman Z-score model uses five financial ratios to predict the likelihood of bankruptcy, with the most important ratio being the earnings before interest and taxes to assets ratio. This ratio measures the amount of income generated by a company's assets, without accounting for the costs of debt financing. A higher ratio indicates a company is more likely to be able to meet its financial obligations and avoid bankruptcy.

What Is the Most Important Factor Determining Bankruptcy, According to the Altman