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Distress & Quality Models
The published models that score financial distress and earnings quality — what each one measures, where it fails, and how to read it as a research signal.
Altman Z-Score
A weighted score that estimates a company's risk of bankruptcy within about two years.
Piotroski F-Score
A 0-to-9 scorecard of a company's fundamental strength based on nine pass/fail financial tests.
Ohlson O-Score
A nine-factor statistical model that turns a company's financials into a model-estimated probability of bankruptcy.
Zmijewski Score
A three-ratio statistical model from 1984 that turns profitability, leverage, and liquidity into a model probability that a company is financially distressed.
Merton Distance-to-Default
A structural model that measures how many standard deviations a company's asset value sits above its default point.
CHS Failure Hazard
A statistical model that turns eight accounting and market inputs into an estimated probability that a company hits financial failure within the next 12 months.
Beneish M-Score
A statistical model that flags the likelihood a company has manipulated its reported earnings.
Sloan Accrual Ratio
A measure of how much of a company's reported profit comes from accounting entries rather than cash actually collected.
Economic Profit
Economic profit asks whether a company earns more on its invested capital than that capital costs to raise.
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