what does the zeta model tell you 
the zeta model returns a single number the z score or zeta score to represent the likelihood of a company going bankrupt in the next two years the lower the z score the more likely a company is to go bankrupt the zeta model s bankruptcy prediction accuracy has been found to range from more than 95 percent one period prior to a bankruptcy to 70 for a series of five prior annual reporting periods 1z scores exist in so called zones of discrimination which indicates the likelihood of a firm going bankrupt a z score lower than 1 8 indicates that bankruptcy is likely while scores greater than 3 0 indicate bankruptcy is unlikely to occur in the next two years companies that have a z score between 1 8 and 3 0 are in the gray area and bankruptcy is as likely as not different z score formulations and zeta models exist for special cases such as private firms emerging market risks and non manufacturer industrials the zeta model was developed by new york university professor edward altman in 1968 the model was originally designed for publicly traded manufacturing companies later versions of the model were developed for privately held companies small businesses and non manufacturing companies and emerging markets 