Does anyone know whether you cna use this dor financial firms and any adjustments you would make in doing so?
It depends what you’re talking about. If you’re talking about the orginal formulation it was based on manufacturing firms not service firms. Every academic who can’t think of anything else to do has looked at Altman’s Z in a variety of situations and you should be able to find a paper somewhere on Altman’s Z in financial firms. In particular, sales/total assets must be higher for financial firms than manufacturing firms and someone on AF can probably ball park something like the ratio of industry averages so you could adjust the formula that way if you can’t find anything. The problem with this whole methodology is that when I think of financial firms that went bankrupt it was usually some blow-up (e.g., Nick Leeson, EF Hutton, etc) not the kinds of things that are usually measured by Altman’s Z.