Android
Zerodha Broker (Free Delivery)

India's No. 1 Broker with Best Software Trade @ Flat Rs 20

Open Instant Account
market update arrow Ola Electric sells scooters worth Rs 600 cr in 24 hrs, 4 units every second arrow World Bank discontinues business climate report after ethics review arrow Wall St falls as oil, tech losses outweigh retail cheer; Dow drops 130 pts arrow Madras High Court stays certain sub-clauses of new IT Rules arrow Zee board backs former directors, condemns 'baseless' allegations arrow NARCL will have economies of scale with respect to bad asset aggregation arrow 20% of India's adult population fully vaccinated, 62% got one dose: Govt arrow Mittal vows to bring telecom industry together; talks to Voda's Nick Read arrow NARCL: Another brick in the wall; not too different from other ARCs arrow Virat Kohli to step down as India's T20I captain after ICC T20 World Cup arrow FM Nirmala Sitharaman announces over Rs 30,000 cr guarantee for bad bank arrow Poonawalla Fincorp MD Abhay Bhutada quits following Sebi action arrow Covid LIVE: Kerala sees 22,182 new cases, 178 deaths in last 24 hrs arrow Will opt for moratorium to redirect cash flow to build network: Mittal arrow Byju's continues acquisition spree, buys US-based coding startup Tynker arrow DATA STORY: India adds 30,570 cases, Kerala's positivity rate at 18.21% arrow GST Council meet on Friday; rate review, concession to Covid drugs on cards arrow PSU Bank index up 4% ahead of FM press conference; SBI nears record high arrow T+1, peak margin norms in interest of investors, says Sebi chief Tyagi arrow This recently listed stock has zoomed 120% over its issue price arrow Indus Towers soars 15%, nears 52-week high on telecom relief package arrow India's record run in stock market raising risks for economy: Research arrow Alzheimer's disease: hyperbaric oxygen proposed as treatment in new study arrow APL, Apollo Tricoat trade ex-bonus; stocks record fresh life-time highs arrow Google Pixel 6 and Pixel 6 Pro specifications revealed ahead of launch

Trading and Investment Terminology

Zeta Model

The Zeta Model is a mathematical model that evaluates the odds of a public company failing and facing bankruptcy within a two-year timeframe.

The number delivered by the model is referred to as the Z-score of the company. The number is viewed to be a reasonably precise indicator of future bankruptcy.

Z Score = 1.2A+1.4B+3.3C+0.6D+E

where:
A=working capital divided by total assets
B=retained earnings divided by total assets
C=earnings before interest and tax divided by total assets
D=market value of equity divided by total liabilities
E=sales divided by total assets

The model was published in 1968 by Edward I. Altman. He was a professor of finance in the New York University.

The subsequent Z-score uses numerous corporate income and balance sheet records to quantify the financial strength of a company.

The Zeta model formula returns a single number, the z-score, to represent the probability of a company going for bankruptcy in the following two years.

The lower the z-score, the more probable a company will go bankrupt.

The Zeta model’s bankruptcy forecast prciseness has been found to go from over 95% percent one period before a bankruptcy to 70% for a progression of five prior annual reportings.

Z-scores have so-called zones of separation, which demonstrates the probability of a company going bankrupt.

Z > 2.99 - Safe Zone
1.81 < Z < 2.99 – Grey Zone
Z < 1.81 - Distress Zone

Latest News हिंदी समाचार
ad