NEW YORK (
TheStreet) -- Is the casino sector in dire threat of going bankrupt over the next two years? According to the Altman Z-Score ... maybe.
The Altman Z-Score, a formula developed by New York University professor Edward Altman in 1968, measures several aspects of a company's financial health to forecast the probability of it going bankrupt. Since its inception, the formula has been 72% accurate in predicting corporate bankruptcies two years prior to the filing.
On a general basis, companies with a Z-Score higher than 3 are considered safe, while those with a score of 1.8 or lower are considered distressed. Anything in between is a gray area. Using I-Metrix, TheStreet has determined that of the eight casino operators with a market cap over $200 million, all have a score below 3, and seven of the eight are residing in the danger zone, with a score lower than 1.8.
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