Pallisard, of course people are important, in "disecting" a new business opportunity, I usually look at four main elements, starting with "customers" (a market for the product), technology (whether the business has the right technology to satisfy the customer's needs), people (whether the business has the human resources for the task and that does not count just techies and manufacturing, but marketing and management) and finally Money.
The funny thing about Altman's approach is that it attempts (and statistically does so quite well), to assess all these factors from historical "numbers" on the company, since these historical numbers do reflects more or less on these four elements making a business a success. The Altman model is no panacea, however, and you cannot rely just on it (there are a lot of companies that will score well above 3 but have no growth prospects whatsoever), but one should not disregard this analysis either. It should be one of many tools in your armamentarium when attempting to determine the prospects of a company.
Zeev |
