The resolution function established by Altman, that is, the resolution function established by Altman of Z-score model, is a bankruptcy prediction model designed by famous financial expert Terman. According to the discriminant analysis technology in mathematical statistics, he made a statistical analysis of the past loan cases of banks, selected some ratios that best reflect the borrower's financial situation, have the greatest impact on the loan quality, and have the most predictive or analytical value, and designed a mathematical model that can distinguish the loan risk to the greatest extent (also known as

The mathematical model is z = 0.012 (x1)+0.014 (x2)+0.033 (x3)+0.006 (x4)+0.999 (X5).

After statistical analysis and calculation, Altman finally determined the critical value of the borrower's default Z0=2.675. If Z≤2.675, the borrower is classified as a default group. Conversely, if Z≥2.675, the borrower is classified as a non-defaulting group. When 1.8 1≤Z≤2.99, the judgment error is large, and the overlapping area is called unknown area or gray area.