As a new subscriber I checked out my porfolio and was suprised to find Vodafone in the distress area of the Altman Z2 Score. I wonder if this score is relevant to a non manufacturing company.
Yes, it's quite surprising and we've been puzzling over it too. There are two Altman Z-scores, one (Z1) for manufacturing and another (Z2) for non-manufacturing. The score in question is Z2 so it does seem relevant. More background on Altman here: http://www.stockopedia.com/content/the-altman-z-score-is-it-possible-to-predict-corporate-bankruptcy-using-a-formula-55725/
However, it's worth remembering that Altman, like any quant metric, does have false positives - In its initial test, the Altman Z-Score was found to be 72% accurate in predicting bankruptcy two years prior to the event. In subsequent tests over 31 years up until 1999, the model was found to be 80-90% accurate in predicting bankruptcy one year prior to the event.
So this might just be one of those cases where it's just non predictive, but frankly there's no way to know. By clicking on the Altman link popup, you will see more detail as to where and why it's failing, which may help take a view. The Piotroski score - which is effectively a kind of Financial Health Trend - does also give a very different picture.
