Altman Z-score

A combination of higher interest rates, stubborn inflation and companies dealing with huge debt loads piled up during the easy money era have resulted in one of the busiest periods for corporate bankruptcies in quite some time.

NYU professor Edward Altman, who's best known for the Altman Z-score, a popular tool for predicting bankruptcies, recently told NPR in an interview that corporate zombies are on the rise and that he predicts bankruptcies will get worse in 2024 when an enormous amount of corporate debt comes due and companies are facing difficulties trying to refinance or pay off that.

debt.

The reasons for rising bankruptcies vary around the world.

So there are certain investors, and they'll look at the kind of things that relate to bonds and try and use that analysis in order to invest in, um, to, to invest in equity.

There's things like the Altman Z-score, uh, which is a measure that's used to analyze credit risk, but equally equity investors will look at that kind of thing as well in order to decide what stocks to buy.

Next thing up is activist investing, and this is a type of investing which is sort of almost the polar opposite of passive investing.

Well, i- in, in name as well, [laughs] I guess.