The Altman Z-score has a set scale by which results are expected to be measured. A score of 3 or greater indicates a company should be safe from filing bankruptcy. A score between 1.81 and 3 indicates that a company is likely to file bankruptcy at some point. The Z-score is used to predict the likelihood that a company will go bankrupt. A company's Z-score is calculated based on basic indicators found on its financial statements (e.g. earnings, assets, liabilities, equity, etc.). Lower and negative Z-scores indicate a higher likelihood that a company will go bankrupt, whereas higher and positive Z = (X - μ) / σ. 2 steps of standardizing a distribution. 1. Original raw scores transformed to z-scores. 2. The z-scores are transformed to new X values so that the specific mean and standard deviation are determined. When you need to find a proportion between a negative (-) and positive (+) z-score: You would use the following formula: Z-score = (the initial data point - mean)/standard deviation. Brunner uses an example of finding out how a student's test score of 90 compared with the scores his peers received, which are 75, 80, 85, 90, and 95. First, we find out the mean of this data set, which is 85. A Z-score (also referred to as a standard score) indicates the number of standard deviations that an observed value is from the mean in a standard normal distribution. For example, a Z-score of 1 indicates that the observed value is 1 standard deviation from the mean. Your bone density test results are reported in two numbers: T-score and Z-score. T-score. Your T-score is your bone density compared with what is normally expected in a healthy young adult of your sex. Your T-score is the number of units — called standard deviations — that your bone density is above or below the average. .

what does the z score represent