This paper presents a method to calculate the area of vulnerability by using the impedance building algorithm. The installation of DG (Distributed Generation) is one of the countermeasures against voltage sags in power systems. In order to estimate the effect of the DG, the voltage sag assessment should be performed based on the area of vulnerability and system fault statistics. To determine the area of vulnerability, system impedance matrix should be calculated. The calculation of the impedance matrix of large systems is time-consuming task. This paper addresses an effective scheme to calculate the area of vulnerability and system impedance matrix.