Business By the Numbers – Part 6 – Z-Score

“Business By the Numbers – Part 5” discussed the importance of tracking your business by using numbers from your Profit and Loss statement to determine your Break Even Analysis.

 

The next topic to discuss is Z-Score.  Again, we’ll use the information from the Vistage* “Formulas for Success” publication.

 

Business Z-Score

 

The final business KPI is our Z-Score.  It is a measure of the overall health for most businesses.  As with the other key indicators, what is important is to measure the trend year over year and see whether the Z-Score is increasing (which is good) or decreasing (which is not good).

 

 

Z-Score Scoring

0 – 1.09          Bankruptcy Imminent

1.10 – 2.60     Very Questionable

2.60 +            Bankruptcy Not Imminent”

Business By the Numbers – Part 7 will feature Additional KPIs.

 

From the beginning, our coaching Chairs have been at the heart of what makes the Vistage experience so powerful for so many members. Vistage Chairs are a distinguished group of business leaders who come to us from a wide range of industries. Some have owned businesses, many have been CEOs of domestic and international companies, and all are united by a desire to share their insight and expertise to educate other business leaders in their communities through executive business coaching.

 

About the Author

Jim D'Amico

My name is Jim and people usually call me Jim. Sometimes I’m called James, usually at a doctor’s office. My favorite season is Summer because I like warm, sunny weather. I also like the colors of Autumn. My favorite hobby now is reading, but in the past I spent a great deal of time with my coin collection and drawing and painting pictures. My favorite sport is baseball and the Yankees are my team. I coached baseball and softball for nearly twenty years with my three children. My favorite activity is going out to dinner, throw in a little rock music from the 60’s and early 70’s and it’s a good night. My favorite quotes: “If you think you can do a thing or think you can't do a thing, you're right.” - Henry Ford. “I have not failed. I've just found 10,000 ways that won't work.” - Thomas A. Edison. “Opportunity is missed by most people because it is dressed in overalls and looks like work.” - Thomas A. Edison.

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