how should an investor interpret the altman z score 
investors can use altman z score plus to evaluate corporate credit risk a score below 1 8 signals the company is likely headed for bankruptcy while companies with scores above 3 are not likely to go bankrupt investors may consider purchasing a stock if its altman z score value is closer to 3 and selling or shorting a stock if the value is closer to 1 8 in more recent years altman has stated a score closer to 0 rather than 1 8 indicates a company is closer to bankruptcy did the altman z score predict the 2008 financial crisis in 2007 altman s z score indicated that the companies risks were increasing significantly the median altman z score of companies in 2007 was 1 81 which is very close to the threshold that would indicate a high probability of bankruptcy altman s calculations led him to believe a crisis would occur that would stem from corporate defaults but the meltdown which brought about the 2008 financial crisis began with mortgage backed securities mbs however corporations soon defaulted in 2009 at the second highest rate in history 