This is a measure of the net liquid assets a firm has, its working capital. It measures readily available assets (cash and other assets expected to be converted to cash in the near term, such as receivables and inventories) over and above liabilities that are expected to be paid quickly (such as payables and short-term debt). It's scaled on to total assets in order to facilitate comparison among different size firms. Edward Altman, creator of the Altman Z score, maintains that deterioration in this ratio may indicate impending financial distress.

Our Formula

AltmanX1 = WorkCapQ / AstTotQ

NOTE: when N/A's are encountered during preliminary reports the preliminary data is excluded by falling back to previous quarter

Related Factors:

AltmanX1 AltmanX2 AltmanX3 AltmanX4 AltmanX5 AltmanX4Rev AltmanZ