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Apple Altman Z-Score

: 6.06 (As of Today)
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Apple has a Altman Z-Score of 6.06, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score is less than 1.81, it is in Distress Zones.
When Altman Z-Score is greater than 2.99, it is in Safe Zones.
When Altman Z-Score is between 1.81 and 2.99, it is in Grey Zones.

NAS:AAPL' s Altman Z-Score Range Over the Past 10 Years
Min: 1.96   Med: 5.15   Max: 10.64
Current: 6.06

1.96
10.64

During the past 13 years, Apple's highest Altman Z-Score was 10.64. The lowest was 1.96. And the median was 5.15.


Apple Altman Z-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Apple Annual Data
Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.28 3.71 3.62 4.22 4.24

Apple Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
Altman Z-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.03 4.30 4.24 4.95 4.61

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Apple Altman Z-Score Distribution

* The bar in red indicates where Apple's Altman Z-Score falls into.



Apple Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Apple's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1487+1.4*0.1036+3.3*0.2194+0.6*6.9541+1.0*0.8364
=6.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2020:
Total Assets was USD 320,400 Mil.
Total Current Assets was USD 143,753 Mil.
Total Current Liabilities was USD 96,094 Mil.
Retained Earnings was USD 33,182 Mil.
Pre-Tax Income was 13135 + 25918 + 16127 + 11911 = USD 67,091 Mil.
Interest Expense was -757 + -785 + -810 + -866 = USD -3,218 Mil.
Revenue was 58313 + 91819 + 64040 + 53809 = USD 267,981 Mil.
Market Cap (Today) was USD 1,682,719 Mil.
Total Liabilities was USD 241,975 Mil.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(143753 - 96094)/320400
=0.1487

X2=Retained Earnings/Total Assets
=33182/320400
=0.1036

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(67091 - -3218)/320400
=0.2194

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1682718.877/241975
=6.9541

X5=Revenue/Total Assets
=267981/320400
=0.8364

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Apple has a Altman Z-Score of 6.06 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Apple  (NAS:AAPL) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Apple Altman Z-Score Related Terms


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