Springate score

What is the Springate score?

The Springate score is one of the well-known bankruptcy prediction models, which is developed on the basis of the Altman model. In the process of developing a model of the 19 financial ratios that were considered the best, Springate selected four coefficients, based on which the model was built.

Formula:

Springate score = 1.03A + 3.07B + .66C + .4D

Definitions:

• A = Working capital / Total assets
• B = EBIT / Total assets
• C = Profit before tax / Current liabilities
• D = Revenue / Total assets

What does the Springate score mean?

If the value of this ratio is greater than 0.862, the analyzed company is in a stable state. If the value is less than 0.862, it means the company might be under financial stress.