Edward Altman

Edward I. Altman (born 1941) is a Professor of Finance, Emeritus, at New York University's Stern School of Business. He is best known for the development of the Altman Z-score for predicting bankruptcy which he published in 1968. Professor Altman is a leading academic on the High-Yield and Distressed Debt markets and is the pioneer in the building of models for credit risk management and bankruptcy prediction. He is the brother of Stuart Altman, a noted health care economist.

Altman teaches "Bankruptcy and Reorganization" and "Credit Risk Management" in the Risk Management Open Enrollment program for Stern Executive Education, as well as on the TRIUM Global Executive MBA Program, an alliance of NYU Stern, the London School of Economics and HEC School of Management, and for both the Master of Science in Global Finance (MSGF) and Master of Science in Risk Management Program for Executives (MSRM). MSGF is jointly offered by NYU Stern and the Hong Kong University of Science and Technology. He also teaches in the school's MBA programs and has been a Stern faculty member since 1967.

The Altman Z-score 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. Studies measuring the effectiveness of the Z-Score have shown that the model has an 80%–90% reliability. Altman's equation did an excellent job at distinguishing bankrupt and non-bankrupt firms and is used by a large number of investment managers and hedge funds in their investment strategies and management. In addition, his Z-score model has been used by management of distressed companies to avoid having to file for bankruptcy reorganization. Altman's models have been used by banking institutions throughout the world in order to quantify the probability of default of their lending portfolios.

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