{"id":1052,"date":"2023-05-12T09:03:35","date_gmt":"2023-05-12T09:03:35","guid":{"rendered":"https:\/\/eodhd.com\/financial-academy\/?p=1052"},"modified":"2023-10-16T11:53:46","modified_gmt":"2023-10-16T11:53:46","slug":"how-to-calculate-altman-z-score-or-piotrosky-score","status":"publish","type":"post","link":"https:\/\/eodhd.com\/financial-academy\/financial-faq\/how-to-calculate-altman-z-score-or-piotrosky-score","title":{"rendered":"How to Calculate: Altman Z-Score, Piotrosky Score"},"content":{"rendered":"\n

As our previous article explained<\/a>, fundamental data is used to assess a company\u2019s value and for fundamental analysis of the asset. Here we will provide a couple of interesting scores that can help to evaluate a company\u2019s stock. The main difference of this article in comparison with others about Altman Z-Score and Piotrosky score in that it’s practical, and provides exact fields from Financial reports with our Fundamental API<\/a><\/strong>, then it’s very fast and easy to calculate these scores with our data.<\/p>\n\n\n\n

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Register & Get Data<\/span><\/a><\/p>\n\n\n\n

Altman Z-Score<\/h2>\n\n\n\n

The Altman Z-score<\/strong>, in simple terms, estimates the likelihood of a company\u2019s bankruptcy (see Wikipedia article<\/a> for more details). It uses five financial ratios calculated from a company\u2019s annual report and helps predict if the company\u2019s (highly likely) going towards bankruptcy or not.<\/p>\n\n\n\n

The formula for this score is:<\/p>\n\n\n\n

<\/em> <\/em>Altman Z-score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E<\/em><\/p>\n\n\n\n

Where:<\/p>\n\n\n\n

<\/em> <\/em>A = working capital \/ total assets<\/em><\/p>\n\n\n\n

<\/em> <\/em>B = retained earnings \/ total assets<\/em><\/p>\n\n\n\n

<\/em> <\/em>C = earnings before interest and tax \/ total assets<\/em><\/p>\n\n\n\n

<\/em> <\/em>D = market value of equity \/ total liabilities<\/em><\/p>\n\n\n\n

<\/em> <\/em>E = sales \/ total assets<\/em><\/p>\n\n\n\n

We either provide all of these parameters directly in our Fundamental data API feed<\/a>, or they can be calculated from those that we provide. <\/p>\n\n\n\n

Working capital equals totalCurrentAssets <\/strong>minus totalCurrentLiabilities <\/strong>(both part of the Balance Sheet section). <\/p>\n\n\n\n

totalAssets<\/strong> is found in the Balance Sheet section.<\/p>\n\n\n\n

retainedEarnings <\/strong>is found in the Balance Sheet section.<\/p>\n\n\n\n

Earnings before interest and tax is ebit <\/strong>found in the Income Statement section.<\/p>\n\n\n\n

Market value of equity is calculated by multiplying SharesOutstanding<\/strong> (under SharesStats section) by the current share price (from our EOD API feed<\/a>). <\/p>\n\n\n\n

totalLiab<\/strong> is found in the Balance Sheet section.Sales is totalRevenue<\/strong> found in the Income Statement section.<\/p>\n\n\n\n

Piotroski Score<\/h2>\n\n\n\n

The Piotroski score is a discrete score between 0 and 9 that estimates the strength of a company\u2019s financial position, where 0 is utterly weak and 9 is incredibly strong. <\/p>\n\n\n\n

There are nine aspects or criteria which are estimated and then either assigned 1 point or 0 points. These nine aspects are divided into three categories, and data for all of them can be taken from our Fundamental data API feed<\/a> directly – we either provide these parameters or they can be calculated from those that we provide.<\/p>\n\n\n\n

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  1. Profitability <\/strong>\n