Güncellendi
[blackcat] L3 Financial Minesweeper: Altman Z Score
Level: 3
Background
The Altman Z-score is the output of a credit-strength test that gauges a publicly traded manufacturing company's likelihood of bankruptcy. The Altman Z-score is a formula for determining whether a company, notably in the manufacturing space, is headed for bankruptcy.
Function
The possibility of financial failure or bankruptcy of the enterprise is analyzed and predicted through the comprehensive score. The lower the Z value, the more likely the enterprise will go bankrupt. By calculating the Z value of an enterprise for several consecutive years, we can find out whether the enterprise has signs of financial crisis. Generally speaking, when the Z value is greater than 2.675, it indicates that the financial situation of the enterprise is good, and the possibility of bankruptcy is small; When the value is less than 1.81, it indicates that the enterprise is in a potential bankruptcy crisis; when the Z value is between 1.81 and 2.675, it is called a "gray area, indicating that the financial situation of the enterprise is extremely unstable.
Remarks
STOCKs ONLY which require financial data.
X1~X5 coefficients can be customized for different stock markets.
Compared to TradingView official Altman Z-Score Indicator.
Feedbacks are appreciated.
Background
The Altman Z-score is the output of a credit-strength test that gauges a publicly traded manufacturing company's likelihood of bankruptcy. The Altman Z-score is a formula for determining whether a company, notably in the manufacturing space, is headed for bankruptcy.
Function
The possibility of financial failure or bankruptcy of the enterprise is analyzed and predicted through the comprehensive score. The lower the Z value, the more likely the enterprise will go bankrupt. By calculating the Z value of an enterprise for several consecutive years, we can find out whether the enterprise has signs of financial crisis. Generally speaking, when the Z value is greater than 2.675, it indicates that the financial situation of the enterprise is good, and the possibility of bankruptcy is small; When the value is less than 1.81, it indicates that the enterprise is in a potential bankruptcy crisis; when the Z value is between 1.81 and 2.675, it is called a "gray area, indicating that the financial situation of the enterprise is extremely unstable.
Remarks
STOCKs ONLY which require financial data.
X1~X5 coefficients can be customized for different stock markets.
Compared to TradingView official Altman Z-Score Indicator.
Feedbacks are appreciated.
Sürüm Notları
OVERVIEWThe [blackcat] L3 Financial Minesweeper: Altman Z Score indicator assesses the financial health of a company using the Altman Z-Score model. This model combines various financial ratios to predict the likelihood of bankruptcy or financial distress. The indicator plots the calculated Z-Score on the chart and provides visual feedback on the company's financial status, helping traders make informed decisions about their investments 💼📉.
FEATURES
Calculates the Altman Z-Score based on key financial metrics:
Working Capital / Total Assets
Retained Earnings / Total Assets
Earnings Before Interest and Taxes / Total Assets
Market Value of Equity / Book Value of Liabilities
Sales / Total Assets
Plots the Z-Score on the chart with dynamic coloring based on its value 🎨
Provides real-time assessment of the company's financial status:
Financially Sound (Z-Score > 2.675)
Financially Unstable (1.81 < Z-Score ≤ 2.675)
Financially Risky (Z-Score ≤ 1.81)
Displays the Z-Score value and financial status in a table format ⚙️
Allows customization of coefficients used in the Z-Score calculation 🔧
HOW TO USE
Add the indicator to your TradingView chart by selecting it from the indicators list.
Observe the plotted Z-Score line and its corresponding color changes.
Monitor the displayed table for real-time updates on the company's financial status.
Use this information alongside other fundamental and technical analyses for better decision-making.
LIMITATIONS
The indicator relies on quarterly financial data, which might not capture recent changes immediately.
The accuracy of predictions depends on the quality and timeliness of the input data 🕒.
Users should consider multiple factors beyond just the Z-Score when evaluating a company's financial health.
NOTES
Ensure that you have access to reliable financial data sources for accurate calculations.
Test the indicator thoroughly on historical data before applying it to live trading situations 🔍.
Customize coefficient inputs if necessary to fit specific market conditions or sectors.
Sürüm Notları
█ OVERVIEWThis indicator computes the classic Altman Z-Score to help you spot companies at risk of financial distress before the market fully prices it in. Think of it as a financial minesweeper: green means sound, orange means uncertain, red means danger.
█ CONCEPTS
The Altman Z-Score (Edward Altman, 1968) combines five weighted ratios from quarterly financial statements into a single number that historically separated healthy manufacturers from bankrupt ones:
• X1 — Working Capital / Total Assets (liquidity)
• X2 — Retained Earnings / Total Assets (accumulated profitability)
• X3 — EBIT / Total Assets (operating earning power)
• X4 — Market Cap / Total Liabilities (market-implied cushion over debt)
• X5 — Revenue / Total Assets (asset turnover)
Z = 1.2·X1 + 1.4·X2 + 3.3·X3 + 0.6·X4 + 1.0·X5, built from fundamental data requested via request.financial and refreshed quarterly.
Zones:
• Z > 2.99 — Safe zone (financially sound)
• 1.81 < Z ≤ 2.99 — Grey zone (unstable, monitor closely)
• Z ≤ 1.81 — Distress zone (elevated bankruptcy risk)
█ HOW TO USE
1 — Add the indicator to an equity chart that has fundamental data coverage.
2 — Read the dashboard: it shows the current Z-Score, its zone, every X-ratio and its weighted contribution to Z.
3 — Watch the line color and background: they shift from green to orange to red as financial health deteriorates.
4 — Markers flag the bar where zone status changed; alerts are available for all three transitions.
Input Parameters
• Model Coefficients — the five Altman weights (defaults 1.2 / 1.4 / 3.3 / 0.6 / 1.0)
• Zone Thresholds — safe and distress boundaries (defaults 2.99 / 1.81)
• Visuals — toggles for the score label, dashboard, zone background, zone-change markers and X1-X5 component lines
█ FEATURES
• Live status dashboard with per-component breakdown and weighted contributions
• Zone background coloring, dashed boundary lines and grey-zone fill
• Zone-change markers plus alerts for Safe / Grey / Distress transitions
• Division guards: symbols without fundamentals return a clean "No data" state instead of errors
• Optional X1-X5 component lines for ratio-level analysis
█ LIMITATIONS
• Requires TradingView fundamental data; many OTC, non-US and non-equity symbols are not covered
• The original model was calibrated on US manufacturers; banks, insurers and young growth firms fit poorly
• Financials update quarterly — this is a screening tool, not an entry/exit timer
• Research and education aid only, not investment advice
█ NOTES
• V2 fixes the original X5 coefficient scaling and the market-cap term (now price × shares outstanding), and uses total revenue for X5 as defined in the 1968 paper
• Credit: Edward I. Altman, "Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy" (1968)
════════════════════════════════════════════════════════════════════════
For questions or feedback, please use the comments section below.
Feel free to use and modify — attribution appreciated.
Don't miss out! The first and most important thing to do is to join my Discord chat now! Click here to start your adventure: discord.com/invite/ZTGpQJq My new github for more pine development soon: github.com/wxt-coder
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, alım satım veya diğer türden tavsiye veya öneriler anlamına gelmez ve teşkil etmez. Kullanım Koşulları bölümünde daha fazlasını okuyun.
Don't miss out! The first and most important thing to do is to join my Discord chat now! Click here to start your adventure: discord.com/invite/ZTGpQJq My new github for more pine development soon: github.com/wxt-coder
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, alım satım veya diğer türden tavsiye veya öneriler anlamına gelmez ve teşkil etmez. Kullanım Koşulları bölümünde daha fazlasını okuyun.