Traditionally, financial analysts have rellied on financial ratios for assessing the viability of a company. These ratios, calculated from the financial statements information, allow us to measure and compare several financial treats of an organisation, such us liquidity, solvency, debt, activity, or profitability. Their ability to transform the financial data into homogenous, comparable information, have given them a widespread use within the corporate world: directors, managers, shareholders, competitors, and analysts. However, even though this seems an easy way to evaluate the strenghs and weaknesses of a company, anyone can face some hasle when trying to stablish which combination of which ratios and boundaries will help to asseverate the financial health of a company.
Acknowledging this situation, Professor E.I.Altman, developed in the late 60's a statistical model that would allow to predict the financial viability of a company by means of an automatic analysis of its main financial information. In fact, this model has proven to be very accurate in order to predict bankruptcy on a two years horizon.
In order to estimate the prediction for your company the system requires the below information: