Jamilu, Auwalu AdamuAbdulkarim, Shaibu AlhassanMusa, Hassan2023-12-102023-12-102012-02-02JAMILUAUWALUADAMU School of Mathematical Studies, National Mathematical Centre, Kwali, Abuja. Tel: +2348038679094 E-mail: supiamcelnmcfogmail.eom and ALHASSAN SHAIBU ABDULKARIM Department of Accounting, Nasarawa State University, Keffi and MUSAHASSAN Department of Accounting, Nasarawa State University, Keffihttps://keffi.nsuk.edu.ng/handle/20.500.14448/580The objective of this paper is to present some varieties of bankruptcy prediction models and to use Altman model to determine the credit quality (Bankruptcy level) of a company in Nigeria. Also the paper discusses the role oftransition matrix in rating process. Probit and Logit models for calculating probabilities of survival and Default were also discussed. More so, available literature indicates that, Nigerian financial and non financial institutions rely only on American and European rating agencies like Standard and Poor's, Moody's or Fitch for their assessments of credit quality without comprehensively understanding the models and methodologies employed to arrive at certain rating of the company under consideration. Finally, it is recommended that the Regulators, Board of Directors, Stakeholders and Management should be conversant with the bankruptcy prediction models and performs stress test regularly on thejinancial and non-financial institutions.enBankruptcy, Discriminant, Stress Test, BASEL II.Article