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Altman Z'' score

Edward Altman's 1995 balance-sheet formula for non-manufacturers and companies outside the US, using book equity instead of the share price. His bands are above 2.6 safe, 1.1 to 2.6 grey and below 1.1 distress. It is an academic indicator, not a rating, and is not computed for banks and insurers.

Formula: Z'' = 6.56 x (Working capital / Total assets) + 3.26 x (Retained earnings / Total assets) + 6.72 x (Operating income / Total assets) + 1.05 x (Equity / Total liabilities)