Thursday, December 21, 2006

Using the Altman Z-Score to Check the Financial Quality of your Stocks

Edward Altman invented the Altman Z-Score in the 1960's to determine the statistical probability of a company going bankrupt. The Creditguru.com has a nice interactive Z-score calculator that allows you to type in eight variables to determine the likelihood of failure. According to the site, a score under 1.3 means "Probability of Financial embarrassment is very high." I tried it for Ford Motor Co. (stock symbol F on the NYSE) and came up with a score of .38.

12 comments:

Truely Indian by Heart and Soul said...

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Unknown said...

Hi everyone,
Your blog is quite nice and informative.
We hope our information will be quite useful for your users also.
As we can see Dollar is becoming weaker day by day as compared to Indian Rupees, which is affecting IT Sector Still IT sector got lot of potential as is due to zoom up once again.

Moreover Recently we have witnessed that Indian stock market has touched new heights surprisingly IT sector was not part of it.

Now NIFTY is already in overbought zone. We can expect NIFTY and SENSEX to fall bit that is correction is due.

Best strategy now- For investors wait for minor correction and buy IT stocks at dips.

For traders – You can mint money in bearish and bullish market both .

Regards
SHARETIPSINFO team

Unknown said...

Dear Visitors,

This blog is really nice and informative. We do think our posting will be highly beneficial for you too. From past few days we have witnessed
major downward rally in Indian stock market along with other major exchanges. It was there due to fear of recession in USA which is major economy.

But if we talk technically then Indian stock market is set to go up but still trend is not clear as few indicators are giving buying signals and few are still giving selling
Indications.

So we suggest everyone to wait till
Nifty touches 5350 before taking any long position.


If you have any query feel free to contact us.


Regards

Sharetipsinfo Team

Unknown said...

Indian stock market




Hi Everyone,

This Blog is really nice and helpful . We hope our post will be helpful for your visitors too.
As we all know USA is going through bad patch yet US government is taking many steps too overcome this problem.
and yesterday again we have witnessed Rs vs $ at 40+. Which is good sign for stock market if Dollar starts becoming strong.
Specially it will benefit IT sector so we can expect Indian stock market becoming more stronger.

One can expect SATYAM, WIPRO to go up in coming days.

Now apart from IT sector its best time to buy and hold MIDCAPS for medium term say 2 months. Few Indian stock market recommendation are :-



1. Rajesh Expo

2. TTML

3. SBI

Buy them and hold them for atleast 2 months ( NOTE- Above stocks are not only midcaps ).


Please feel free to contact us at sharetipsinfo_1@yahoo.com for further details


Thanks

Warm Regards

ShareTipsInfo Team

Tips & tricks said...

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Tips & tricks said...

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KnowYourProfit said...

This blog is nice and informative,good to know that the blog created by the webmaster is very helpfull to the visitors

RBI has cut Repo rate by 100 BPS to 6.5%, due to this we can see some rebound in the Indian Stock Market,as this is one of the factors which will also decide the movement of Nifty in coming days along with different other factors,our advice for intraday traders is to trade light


Any Query

Call us

+91-9871142419
+91-9212663485

Mail at :-
knowyourprofit@gmail.com
knowyourprofit@yahoo.com

KnowYourProfit

KnowYourProfit said...

This blog is nice and informative,its our pleasure to post a comment on this blog created by the webmaster


Now as such we had seen in the month of Feb'09 that volitality was very much there considering the various factors deciding the movement of the Indian Stock MarketNow in the coming Month of March'09 which is also the year's closing period,also the important Policies would might be declared around the world will be deciding the movement of Indian Stock Market


Happy Trading a Head


Queries are welcomed

09871142419
09212663485


Knowyourprofit@gmail.com


KnowYourProfit

Hard said...

We all get bombarded every day with mails, morning briefs as to which stock we should pick and how will be the market trend today. Every time the brokerage houses will send the stock market tips as if we all are playing a gamble and need the tricks as to how we can win it. And anticipating as to how to do stop loss and at least will make smaller profits. What most of the investor do is they consider short term trading as the long term investment and believe as to how it can be doubled in a day. Buying a stock just because the price is low and some stock market tip you received that this will boom in the market today. What most of us do is that we all trade with money which we can’t afford to lose but the market always says that invest only that money which is in excess to you. All of these are the big mistakes which we commit every day in spite of being reminded every time that we should complete our home work for the next day.
Things to Remember when invest in stock market:
 We believe that the fundamental says invest in those company about which you know completely , but that doesn’t mean you fall in love with a company and a particular stock just because you are familiar with it or it create news in the stock market every time. Most of us just try proving our fundamentals are right and for that we apply too many technical indicators on that stock. It’s not true that the stock will go according to its fundamentals and technical, many stocks behave opposite to their indicators, thus they do not guarantee as to whether it will go up or down.
 Investors jump to penny stocks as they immediately boom in the market due to rumors what need to understand is that the Penny stocks are very risky , and on this basis make your strategy as to which one to pick from that lot and how much to invest . The portfolio of the investor should be constructed in such a manner that it allots weight age to different sector and the sizes of the stocks so that the diversification is there and the risk can be mitigated. Therefore the weight age of penny stocks in one‘s portfolio should not be more that the 15%. This is to minimize the losses and to accumulate the profits also.
 Keep a watch on the industry of the particular stock. Most of the stock behaves according to their industry trend. Thus if in the budget the government committed to play large role in the infrastructure sector , all the stocks will go react as per the budget and the whole sector recorded the jump of 12% on the next day. But it might be the case that the industry is booming and the stock is going down, therefore along with Industry, Company information is also vital.
 Past performance of any company doesn’t not hold true or affect its future performance. Many of the Indian stocks which were heavy weight in the past few years and were considered the blue chip companies in this market are either bankrupt or have become extinct in the market. Thus continuous performance analysis and evaluation is important.



STOCK MARKET TIPS || TIPS FOR STOCK MARKET || STOCK MARKET IDEAS

Penny Stocks said...

Thanks for sharing such juicy information. Hope you will publish more information like this.
________________
penny stocks

Steven Anderson said...

First of all thanks for trading. Make this work continue and improve day by day.

Steven Anderson said...

Well nice post.Keep posting more.