Hi Larry,
Thank you for your insights and discussions on the Altman z-score topic.
I was just doing a z-score for a beer manufacturer in a frontier market and the following were the findings
1. The current z- score looks healthy at 3.87 in 2016, but the trend has been gradually declining from 6.29 in 2011.
2. I tried to break down the contribution of each metric to the total score and I found out that on a 5-year average, 53% of the score is contributed by one metric; Market value equity/ total liabilities. The others Sales/Assets contributed 26% and Ebit/assets contributed 23%. The other two had a negative contribution.
My question is what should I read from these two findings of the company? Should I be worried about the trend and the dependence of a single metric in getting the score?