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Springate score

Springate score

Description

Springate score is a model, used to evaluate the company’s probability of bankruptcy. It was created in 1978 by Gordon L.V. Springate, who continued developing the Altman model. Inspite of that, the Springate score is still a less popular model for bankruptcy predictions than Altman’s model. Data needed to calculate this ratio is collected from the balance sheet, income statement and cash flow statement.

Norms and limitations

If the value is below 0.862 it means that the possibility of a company’s bankruptcy is high, so the company is considered unstable and dangerous.

In general,if the value of Springate score goes down to 0.9 or below, it would be smart to consider paying serious attention to the company’s condition.

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