Altman Z

[vorobey]

I am trying to work out if a business is financially healthy and am required to use the altman Z score to do so. Can anyone give me some advice on this?

Is there othe financial analysis tools that would be suitable for test the health of a business?

[julien]

Altman Z scores are ok to test for the probability of almost-certain bankruptcy but does not tell you about the overall health of the business (such as its margins, whether it satisfies or not the cost of capital -weighted average cost of capital- and so on ...) If I were you, I'd prefer a traditional financial analysis in order to get a global overview of the business.
If you are forced to proceed with the Altman Z scores, you need to find the most recent coefficients of the equation and compute the score from the financial ratios of your target company (it's relatively straightforward but be sure to work with accurate financial ratios and not just with those you'd find in a financial database, which won't be adjusted).