patterns / z_distress

credit thesis

Z distress

Altman Z'' in the distress zone (<1.1) — the academically calibrated bankruptcy predictor, computed from the filed balance sheet (plus the P&L where disclosed)

the signature — what the register must show
staff ≥5
Altman Z'' < 1.1
total assets and liabilities both positive
'full' basis where the P&L is filed, 'partial' (EBIT term omitted) where only the balance sheet is available

Why it matters

Altman's Z-score is the most validated bankruptcy predictor there is — half a century of out-of-sample confirmation. The Z'' variant (1995) is calibrated for private non-manufacturers: liquidity, lifetime retained profitability, current operating return and the equity cushion, each weighted by what actually separated failed firms from survivors. Below 1.1 is the empirical distress zone.

The play

A credit/turnaround conversation backed by the industry's common language: 'in the Altman distress zone' lands with any bank or fund. Watch the trajectory too — a falling Z is worth more than a low one.

How it's kept honest

The badge is recomputed nightly across the whole index, and re-evaluated live the moment a company files — so a match is always a statement about the current register, not a stale list. Like every signal on the radar: a prompt to look closer, never a verdict.