Business Bankruptcy Risk Calculator: How Close Is Your Business to Distress?

The Altman Z-Score is a quantitative model developed by NYU finance professor Edward Altman that predicts business bankruptcy with 72–80% accuracy 1–2 years before failure. It combines five financial ratios — working capital, retained earnings, EBIT, equity-to-debt, and revenue-to-assets — into a single composite score. A score above 2.99 indicates a safe zone, 1.81–2.99 a grey zone, and below 1.81 a distress zone with high bankruptcy probability. For business owners and CFOs, the Z-Score is not just an academic metric — it is a diagnostic tool that identifies which financial dimensions are driving distress risk. A company can have strong revenue but still score poorly due to low working capital (liquidity crisis), high debt relative to equity (leverage risk), or insufficient retained earnings (historical profitability weakness). Knowing which ratios are dragging down the score tells you exactly where to focus. This calculator computes the full Altman Z-Score, shows your score relative to the three zones, breaks down each ratio's contribution, flags the ratios that most impair your score, and models how improving each dimension would change your overall risk level. It covers both the original Z-Score (public companies) and the Z'-Score (private companies), which uses book value of equity instead of market value.