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Edward I. Altman (born 1941) is a Professor of Finance at New York University`s Stern School of Business. Altman is known for the development of the Z-Score formula, which he published in 1968.

The Z-Score for Predicting Bankruptcy is a multivariate formula for a measurement of the financial health of a company and a powerful diagnostic tool that forecasts the probability of a company entering bankruptcy within a 2 year period. Studies measuring the effectiveness of the Z-Score have shown that the model has a 70%-80% reliability.

Altman's equation did a good job at distinguishing bankrupt and non-bankrupt firms. Of the former, 94% had Z scores less than 2.7 before they went bankrupt. In contrast, 97% of the non-bankrupt firms had Z scores above this level.

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Ed Altman Biography Edward I. Altman is the Max L. Heine Professor of Finance at the New York University Stern School of Business. He is the Vice-Director of the NYU Salomon Center for Research in Financial Institutions and Markets, and since 1990 has headed the research effort in fixed income and credit markets at the center.

Professor Altman has been with Stern for more than a decade. Prior to serving in his present position, Professor Altman chaired the Stern School's MBA Program. His primary areas of research include bankruptcy analysis and prediction, credit and lending policies, risk management in banking, corporate finance and capital markets. He has been a consultant to several government agencies, major financial and accounting institutions and industrial companies and has lectured to executives in North America, South America, Europe, Australia-New Zealand, Asia and Africa. He has testified before the U.S. Congress, the New York State Senate and several other government and regulatory organizations and is a Director and a member of the Advisory Board of a number of corporate, publishing, academic and financial institutions.

Professor Altman has an international reputation as an expert on corporate bankruptcy, high yield bonds, distressed debt and credit risk analysis. He was named Laureate 1984 by the Hautes Etudes Commerciales Foundation in Paris for his accumulated works on corporate distress prediction models and procedures for firm financial rehabilitation, and awarded the Graham & Dodd Scroll for 1985 by the Financial Analysts Federation for his work on Default Rates on High Yield Corporate Debt. The University of Buenos Aires named him Profesor Honorario in 1996. He is currently an advisor to the Centrale dei Bilanci in Italy and to several foreign central banks. Professor Altman is also the Chairman of the Academic Council of the Turnaround Management Association. He was inducted into the Fixed Income Analysts Society Hall of Fame in 2001 and elected President of the Financial Management Association (2002). In addition, Professor Altman is Chairman of the Board of Trustees of the InterSchool Orchestras of New York and a member of the Board of Trustees of the Museum of American Financial History.

Professor Altman is one of the founders and an executive editor of the international publication Journal of Banking and Finance, and advisory editor of a publisher series The John Wiley Frontiers in Finance Series. Professor Altman has published or edited nearly two-dozen books and more than 100 articles in scholarly finance, accounting, and economic journals. He is the current editor of the Handbook of Corporate Finance and the Handbook of Financial Markets and Institutions, and the author of a number books including Recent Advances in Corporate Finance; Investing in Junk Bonds; Distressed Securities: Analyzing and Evaluating Market Potential and Investment Risk; Corporate Financial Distress and Bankruptcy, and his most recent works Managing Credit Risk: The Next Great Financial Challenge (1998) and Bankruptcy, Credit Risk, and High Yield Junk Bonds (2002).

His work has appeared in many languages including French, German, Italian, Japanese, Korean, Portuguese and Spanish. Prior to his appointment at Stern, Professor Altman has been a visiting Professor at the Hautes Etudes Commerciales and Universite de Paris-Dauphine in France, at the Pontificia Catolica Universidade in Rio de Janeiro, at the Australian Graduate School of Management in Sydney, and Luigi Bocconi University in Milan. Professor Altman received his Masters of Business Administration his doctor of philosophy in finance from the University of California, Los Angeles.

Web: http://w4.stern.nyu.edu/faculty/facultyindex.cgi?id=56