where 
a score below 1 8 means it s likely the company is headed for bankruptcy while companies with scores above 3 are not likely to go bankrupt investors can use altman z scores to determine whether they should buy or sell a stock if they re concerned about the company s underlying financial strength 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 3in more recent years however a z score closer to 0 indicates a company may be in financial trouble in a lecture given in 2019 titled 50 years of the altman score professor altman himself noted that recent data has shown that 0 not 1 8 is the figure at which investors should worry about a company s financial strength 4 the two hour lecture is available to view for free on youtube 2008 financial crisisin 2007 the credit ratings of specific asset related securities had been rated higher than they should have been the altman z score indicated that the companies risks were increasing significantly and may have been heading for bankruptcy altman calculated that the median altman z score of companies in 2007 was 1 81 these companies credit ratings were equivalent to a b this indicated that 50 of the firms should have had lower ratings were highly distressed and had a high probability of becoming bankrupt 5altman s calculations led him to believe a crisis would occur and there would be a meltdown in the credit market he believed the crisis would stem from corporate defaults but the meltdown which brought about the 2008 financial crisis began with mortgage backed securities mbs 6 however corporations soon defaulted in 2009 at the second highest rate in history 7