The Zmijewski score is one of the most well-known models for predicting bankruptcy of enterprises, based on metrics like performance, leverage, and financial liquidity.
Zmijewski developed this formula to gauge the likelihood of a bankruptcy. He applied the formula to 40 companies that had gone bankrupt and 800 stable companies. He collected a more complete picture of the data analyzing both bankrupt and non-bankrupt companies.
Zmijewski Score allows you to assess the likelihood of bankruptcy for an analyzed company. The higher the ratio, the more likely the threat of bankruptcy for the company.