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Fundamental Analysis & Valuation

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Fundamental Analysis & Valuation

Altman Z-Score

A weighted combination of five financial ratios that estimates a company's likelihood of financial distress.

Z = 1.2 x (Working Capital/Total Assets) + 1.4 x (Retained Earnings/Total Assets) + 3.3 x (EBIT/Total Assets) + 0.6 x (Market Value of Equity/Total Liabilities) + 1.0 x (Sales/Total Assets) ratio (x, times) Fundamental Analysis & Valuation

Asset Turnover Ratio

Revenue divided by total assets, measuring how much sales the asset base generates.

Asset Turnover = Revenue / Average Total Assets ratio (x, times)