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# M3A2 Methods - Speech or Presentation Example

Summary
Z-score refers to a statistical measurement of scores in relation to the mean in a group of scores. Sometimes it is referred to as the standard scores. Z-score is useful in the sense that it allows…

## Extract of sample"M3A2 Methods"

Download file to see previous pages Standard scores also offer room to analysts to convert scores from different data sets into scores that can be accurately compared to each other.
A good scenario of where to use the z-score especially in the business environment is to measure the bankruptcy probability of a company. Say you are a statistician and you are given a mandate to check whether a company (may be a manufacturing or any other service) is either at a risk of corporate collapse or is at higher level of liquidity and earnings, which can be interpreted as having a smaller probability of bankruptcy. In this case, you need to check or determine signs of company bankruptcy. As an analyst you will have to look at various possible factors 9financial ratios) affecting the stability of a company. This may include;
It is important to understand that these factors are unique from each other and have different story about the firm’s financial status. It can be a bit confusing to compare them. However, it becomes very easy to compare the different scores using z-score.
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