Zmijewski Score
Calculates the Zmijewski Score, a financial metric used to predict the likelihood of a company going bankrupt. It is a simpler, three-variable model compared to both the Altman Z-Score and the Ohlson O-Score, and is commonly used as a robustness check when those two models disagree, since it is estimated on a different sample and with a different statistical technique (a probit model rather than discriminant analysis or logistic regression).
The formula is as follows:
\[\text{Net Income to Total Assets} = \text{Net Income} / \text{Total Assets}\] \[\text{Total Liabilities to Total Assets} = \text{Total Liabilities} / \text{Total Assets}\] \[\text{Current Assets to Current Liabilities} = \text{Current Assets} / \text{Current Liabilities}\] \[X = - 4.336 - 4.513 \cdot \text{Net Income to Total Assets} + 5.679 \cdot \text{Total Liabilities to Total Assets}\] \[0.004 \cdot \text{Current Assets to Current Liabilities}\] \[\text{Bankruptcy Probability} = \Phi(X),\;\; \text{the standard normal cumulative distribution function}\]The Zmijewski Score can be interpreted as follows:
- A higher X (and therefore a higher bankruptcy probability) indicates a higher likelihood of financial distress.
Also known as: Zmijewski Score, ZFC score, bankruptcy prediction, financial distress score.
Zmijewski Score in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_zmijewski_score as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["DAL", "UAL", "AAL"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.models.get_zmijewski_score().xs("Zmijewski Score", level=1)
Or, after setting up the Finance Toolkit MCP, ask:
What was the Zmijewski score of Delta Air Lines, United Airlines and American Airlines from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| AAL | 2.1018 | 1.8402 | 1.7502 | 1.6446 | 1.6755 |
| DAL | 1.017 | 0.7425 | 0.2026 | -0.0177 | -0.3885 |
| UAL | 1.0493 | 0.7082 | 0.4288 | 0.1763 | 0.0073 |
Parameters
get_zmijewski_score accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | The number of decimals to round the results to. Defaults to None. | 2 |
growth | bool | Whether to calculate the growth of the values. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | None | The trailing period to use for the calculation. Defaults to None, which is 4 on quarterly data (a trailing twelve months), as the score was estimated on yearly statements. | 4 |
show_columns | list[str] | None | List of columns to show in the results. If None, all columns will be shown. Defaults to None. | ["Zmijewski Score", "Zmijewski Bankruptcy Probability"] |