I have a profit loss statement and balance sheet with the following fields: Example
P&L Turnover420,363 - Cost of sales £118,730 £140,169 - Gross Profit £178,862 £280,194 - Operating Costs £154,889 £255,123 - Interest paid (received) £3,007 £4 - Tax paid - £4,838 - Profit After Tax (Loss) £20,966 £20,229 - Balance Sheet Total assets £68,090 £47,032 Current assets £62,975 £43,847 Fixed assets £5,115 £3,185 Total liabilities £56,560 £55,731 Current liabilities £56,560 £55,731 Long-term liabilities - - Shareholder Funds / Net Assets £11,530 £(8,699)
I'd be interested in what models exist to predict credit risk or bankruptcy likelihood based on this information. (I have other meta data available as well, such as industry and location, but I ignore that for the moment)
After researching for a while I found this paper by Altman http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.1968.tb00843.x/full He uses a method called Z-score that is the linear combination of five financial ratios. wikipedia Is this still widely used today? If not what are the alternatives?