Bloomberg reports that New York University professor Edward Altman believes General Motors and Ford have a 46% chance of going bankrupt in the next five years. Altman is the creator of the Z score mathematical formula, which measures bankruptcy risk.
Altman bases his assessment on the danger that both firms may face difficulties in refinancing short-term liabilities, given the current state of the credit market. The article is worth reading if you follow the auto industry and/or are concerned about U.S. manufacturing.
