SUMMARY
Recently insolvent municipalities have declared bankruptcy when they are unable to meet their bond debt or pay their outstanding liability obligations. This analysis looks at the fiscal health of Texas municipalities who have issued debt in the past two years to identify those suffering financial stress that would possibly result in the municipality seeking bankruptcy to resolve its fiscal issues. This investigation analyzes the State of Texas and local municipalities fiscal health using the revised Altman Z-Score with the governments annual financial report data. Additional analysis relating the Z-score to entities bond rating is reported. These findings provide an effective mechanism for investors and interested citizens to evaluate and identify distressed governmental entities with a possible bankruptcy risk.