Altman's Z-score model may be used to:
A) Rank-order firms based on credit quality.
B) Discriminate between firms that are likely to default and those that are not likely to do so.
C) Rate firms.
D) All of the above.

Question

Quizplus · Accepted Answer

Altman's Z-score model is a financial model used to assess the likelihood of a company going bankrupt. The model uses multiple financial ratios and other company data to calculate a score, which can then be used to rank-order firms based on credit quality, discriminate between firms that are likely to default and those that are not likely to do so, and rate firms. Therefore, the correct answer is D, all of the above.

Altman's Z-Score Model May Be Used To