Fundamental: Altman Z''-Score (Non-Manufacturer)

$$Z'' = 6.56X_1 + 3.26X_2 + 6.72X_3 + 1.05X_4$$ $$X_1=\frac{CA-CL}{TA}, \quad X_2=\frac{RE}{TA}, \quad X_3=\frac{EBIT}{TA}, \quad X_4=\frac{BE}{TL}$$

The Altman Z″-Score (1995 revision) adapts the original Z-Score for non-manufacturers and companies outside developed markets, dropping the market-value term that penalizes capital-light and private-equivalent businesses, and replacing it with book equity.

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Interpreting the Score

Z″-Score	Zone
> 2.6	Safe — low bankruptcy risk
1.1 – 2.6	Grey zone — elevated uncertainty
< 1.1	Distress — high bankruptcy risk

Threshold the output with a LOGIC module to build alerts or filters around these zones.

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Missing Data

If any of the seven inputs is missing (null) at a position, the Z″-Score at that position is null.

The score is also undefined — and therefore null — when Total Assets ≤ 0 or Total Liabilities ≤ 0 (every term divides by one of the two). Negative Retained Earnings, negative EBIT, or negative Book Equity are legitimate values and compute straight through — a company can have a real, negative-contribution Z″-Score.

In live execution the module returns exactly one datapoint — the newest position — which is null when it cannot be determined.

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Caveats

• EBIT proxy: this module wires EBIT from Stock: Income and Cash Flow (TTM) → opinc (Operating Income), a standard proxy for EBIT — expect small divergence from screener sites using a stricter definition.
• TTM basis: ebit must be wired as a trailing-twelve-month series to match Altman's annual-statement inputs — Stock: Income and Cash Flow (TTM) already publishes it on a TTM basis.
• Emerging-markets variant not built in: Altman's EM adjustment adds a flat +3.25 to Z″. It is one Add module away from this output if you need it — not built in here to keep the module single-purpose.

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Wiring

From Stock: Balance Sheet (Quarter-End): ca → Current Assets, cl → Current Liabilities, ta → Total Assets, re → Retained Earnings, tl → Total Liabilities. From Stock: Income and Cash Flow (TTM): opinc → EBIT. Select the same company on every node — mixing issuers across nodes silently produces a nonsense score.

Build Book Equity with a Multiply module: bvps (book value per share) × shr (shares outstanding).

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Related Modules

• ALTZ — original Altman Z-Score, for manufacturers
• PFS — Piotroski F-Score (fundamental quality)
• GRAHAM — Graham Number (fair-value benchmark)