Modified Altamn's model

[Farzan]

Hi there. I have a question regarding academic research. I want to how can we interpret the Z values in the modified Altman' model developed by Mack Mason (1990). What does =1.75 mean?
How is the financial health/distress of the company?

 

[kirby]

How to Calculate an Altman Z-Score

A model that distills five key performance ratios into a single score, the Altman Z-score gives investors a good snapshot of corporate financial health.

www.investopedia.com

According to above article, scores lower than 1.8 indicate company heading to bankruptcy.

 

[Farzan]

How to Calculate an Altman Z-Score

A model that distills five key performance ratios into a single score, the Altman Z-score gives investors a good snapshot of corporate financial health.

www.investopedia.com

According to above article, scores lower than 1.8 indicate company heading to bankruptcy.

Thank you so much. But I am actually looking for the interpretation of Z-scores of "modified" Altman's model (by Mack Mason).

 

[kirby]

https://www.bus.umich.edu/OTPR/papers/1990-11.PDF

Above is the original paper where Altman’s model was modified. I see no mention of an interpretation of scores different from the original model.

 

[Farzan]

https://www.bus.umich.edu/OTPR/papers/1990-11.PDF

Above is the original paper where Altman’s model was modified. I see no mention of an interpretation of scores different from the original model.

Thank you Kirby. I have a manuscript under review, and one of the reviewers asked me to interpret the mean z-score=1.755 which was obtained using the modified Altman's model. I have no choice but to use the interpretations of the z zones of the original Altman's model.