what is the zeta model 
the zeta model is a mathematical model that estimates the chances of a public company going bankrupt within a two year time period the number produced by the model is referred to as the company s z score or zeta score and is considered to be a reasonably accurate predictor of future bankruptcy the model was published in 1968 by new york university professor of finance edward i altman the resulting z score uses multiple corporate income and balance sheet values to measure the financial health of a company the formula for the zeta model is 1 2 a 1 4 b 3 3 c 0 6 d e where score a working capital divided by total assets b retained earnings divided by total assets c earnings before interest and tax divided by total assets d market value of equity divided by total liabilities e sales divided by total assets begin aligned zeta 1 2a 1 4b 3 3c 0 6d e textbf where zeta text score a text working capital divided by total assets b text retained earnings divided by total assets c text earnings before interest and tax divided by total assets d text market value of equity divided by total liabilities e text sales divided by total assets end aligned 1 2a 1 4b 3 3c 0 6d ewhere scorea working capital divided by total assetsb retained earnings divided by total assetsc earnings before interest and tax divided by total assetsd market value of equity divided by total liabilitiese sales divided by total assets 