DEFINITION of 'ZScore'
A ZScore is a statistical measurement of a score's relationship to the mean in a group of scores. A Zscore of 0 means the score is the same as the mean. A Zscore can also be positive or negative, indicating whether it is above or below the mean and by how many standard deviations.
INVESTOPEDIA EXPLAINS 'ZScore'
In addition to showing a score's relationship to the mean, the Zscore shows statisticians whether a score is typical or atypical for a particular data set. Zscores also allow analysts to convert scores from different data sets into scores that can be accurately compared to each other. One reallife application of zscores occurs in usability testing.
VIDEO
Loading the player...
RELATED TERMS

Bankruptcy Abuse Prevention And ...
Legislation enacted by President George W. Bush in 2005 that ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Altman ZScore
The output of a creditstrength test that gauges a publicly traded ... 
Credit
1. A contractual agreement in which a borrower receives something ... 
Bankruptcy
A legal proceeding involving a person or business that is unable ... 
Zeta Model
A mathematical formula developed in the 1960s by NYU Professor ...
RELATED FAQS

What is the difference between standard deviation and z score?
Though the finance industry can be complex, an understanding of the calculation and interpretation of basic mathematical ... Read Full Answer >>
Related Articles

Fundamental Analysis
What's a ZScore?
In statistics, Zscore refers to how many standard deviations a particular data point is from the mean of the data. A Zscore of 1 means the data point is one standard deviation from the mean. ... 
Markets
How To Calculate A ZScore
Investors need to know how to detect signs of looming bankruptcy. The Zscore can help. 
Personal Finance
Spotting Companies In Financial Distress
What are the warning signs that a company is struggling  or worse, sinking  financially? Read on to find out. 
Bonds & Fixed Income
An Overview Of Corporate Bankruptcy
If a company files for bankruptcy, stockholders have the most to lose. Find out why. 
Bonds & Fixed Income
Taking Advantage Of Corporate Decline
A bankrupt company can provide great opportunities for savvy investors. 
Fundamental Analysis
What is a Null Hypothesis?
In statistics, a null hypothesis is assumed true until proven otherwise. 
Professionals
Is Now the Time for Junk Bonds?
A bet on highyield bonds is a bet that the global economy will continue to improve...but not too much. 
Investing
What is Debt Financing?
When a company needs to pay for something, it can pay with cash, or it may finance the purchase. Financing means that it gets the money from other businesses or sources, in return for obligations. ... 
Stock Analysis
Is Prospect Capital Exposed To Elevated Losses?
According to a federal government report, the quality of leveraged loans has begun to deteriorate. Prospect Capital specializes in these types of loans. 
Stock Analysis
Why Investors Bailed On Halcon's Stocks
The unexpected plunge in the oil price over the past few months sent Halcon Resources' stocks down nearly 75%.