Altman Z-Score and Beneish M-Score

How accounting distress and earnings-manipulation checks fit into the fundamental analyst workflow.

Category: Fundamentals

What the models screen

Altman Z-score looks for financial distress risk. Beneish M-score looks for earnings-manipulation risk. They are filters, not valuation models.

Operating-company scope

The models are applied to operating companies, not banks and financial institutions where balance-sheet economics differ. Missing or sector-inappropriate line items remain excluded rather than forced.

Workflow role

Fundamental analysis first checks quality, value, and growth gates, then applies Altman and Beneish to reduce false positives before technical and risk review.