Academic literature on the topic 'Altman’s Z- score'
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Journal articles on the topic "Altman’s Z- score"
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BOĎA, Martin, and Vladimír ÚRADNÍČEK. "THE PORTABILITY OF ALTMAN’S Z-SCORE MODEL TO PREDICTING CORPORATE FINANCIAL DISTRESS OF SLOVAK COMPANIES." Technological and Economic Development of Economy 22, no. 4 (2016): 532–53. http://dx.doi.org/10.3846/20294913.2016.1197165.
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The paper challenges the widespread use of Altman’s bankruptcy formula known as the “Z-score model” in Slovak corporate practice and comes with the goal to verify its usability in the Slovak economic environment. To this end, a definition of financial distress is adopted that summarizes weaknesses of Slovak enterprises stemming particularly from liquidity drain and operating losses. The verification juxtaposes three variants of the Z-score model and assesses their prediction ability using a data set of Slovak enterprises for the period from 2009 until 2013. Both the original 1968 Z-score model and the revised 1983 Z-score devised for the US economic environment are compared with the Z-score model re-estimated to the Slovak data copying the methodological procedure of Altman. The results indicate that Altman’s bankruptcy formula is portable into the Slovak economic conditions and useful for predicting financial difficulties in view of the adopted definition of financial distress. Altman’s original and (especially the) revised formulation of the Z-score model are preferable if overall classification accuracy is the main interest. Finally, it is advisable to re-estimate the coefficients of the Z-score model if financially distressed enterprises are the focus and the goal is to classify distressed enterprises as best as possible.
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Bolek, Monika, and Agata Gniadkowska-Szymańska. "The Condition of Companies and their Growth Based on the Example of Companies Included in WIG and DAX Indices." Finanse i Prawo Finansowe 2, no. 30 (2021): 25–44. http://dx.doi.org/10.18778/2391-6478.2.30.02.
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The purpose of the article/hypothesis: The paper discusses the problem of condition of companies together with their growth measured by earnings per share, sales, assets and equity. The condition of a company in a capital market is considered good when the goal of the business is achieved, namely the increase of value that occurs with the increase of earnings per share. We assume that the condition of companies measured by Altman’s Z-score Model scores is related to their growth, and ratios applied in this model influence the growth of companies measured by EPS, sales, assets and equity. The research is conducted in two groups of companies, one representing WIG listed entities and the other one comprising DAX listed companies.
 Methodology: The growth of earnings per share is considered as a measure of companies’ value creation. The growth of EPS should be related to the growth of sales, assets and equity according to the growth theory. To analyze the influence of Altman’s Z-score Model on the growth of EPS, sales, assets and equity, the Pearson and Spearman correlation is applied in the first place. Moreover, logit models are applied to analyze the influence of ratios composing the Altman’s Z-score Model on the growth of EPS, sales, assets and equity.
 Results of the research: Discriminant models can be applied for the assessment of the economic condition of companies but the interpretation of the results should take into account the fact that risky strategies identified by Altman’s Z-score Model as dangerous are related to the higher growth of earnings per share, therefore, there should be a negative relationship between Altman’s Z-score Model scores and EPS growth and it was confirmed in this study.
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Dr.R.SHANMUGAM, Dr R. SHANMUGAM, and A. MAHALAKSHMI A.MAHALAKSHMI. "Validity of Altman’s Z Score Model in Determining Corporate Sickness Among Indian Companies." Indian Journal of Applied Research 4, no. 4 (2011): 100–101. http://dx.doi.org/10.15373/2249555x/apr2014/221.
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Idoge, D. E., and C. O. Chukwuji. "Assessing the Financial Health Status of Small Scale Poultry Businesses in Delta State, Nigeria." Sustainable Agriculture Research 3, no. 4 (2014): 9. http://dx.doi.org/10.5539/sar.v3n4p9.
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<p>The study investigated the financial health status of small scale poultry businesses in Delta State, Nigeria using Altman’s Z-score model. The empirical study was undertaken to assess the solvency and hence future survivability of small scale poultry enterprises in the State. Financial data were extracted from three years (2010 – 2012) financial statements of 125 small scale poultry farms purposively selected from farms operating in the State and incorporated with the Nigerian Corporate Affairs Commission as limited liability agribusinesses. Descriptive statistics which include computed financial ratios, frequency distributions, percentages and tables were applied to analyze the content of the financial statements and Altman’s Z-scores’ were computed for each sampled farm for the three year period. The study shows that in 2010, 47.8 percent of farm enterprises had Z-scores between minus 0.60 to 1.55. In 2011 and 2012, 44.8 percent and 42.4 percent, respectively of the farms had Z-scores between negative 0.60 and 1.55. The study further indicates that 28 percent, 27 percent and 30.4 percent in 2010, 2011 and 2012, respectively, of the sampled farms had computed Z-scores between 2.64 and 4.79 farms. The study recommends the use of Altman’s Z-score by small scale investors as a technique for monitoring the financial health of their agribusinesses to prevent the ugly consequences of bankruptcy and liquidation.</p>
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Diakomihalis, Mihail N. "The Accuracy of Altman’s Models in Predicting Hotel Bankruptcy." International Journal of Accounting and Financial Reporting 2, no. 2 (2012): 96. http://dx.doi.org/10.5296/ijafr.v2i2.2367.
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This paper studies the bankruptcy predictions for different hotel categories in Greece, aiming to determine the zone of discrimination classified as “certainty” for bankruptcy.It also calculates the differentiation degree of the bankruptcy risk that is owed to the different categorisation of the hotels. The three versions of Altman’s model have been applied to evaluate the bankruptcy prediction and its accuracy between the hotel enterprises that fall in the “distress” zone. Approximately 40 percent of the total firms in the distress zone are evaluated, having a Z 1 score below 1.8, while the percentage for the Z 2 formula is 44.5 percent and 36.3 percent for the Z 3 score. The Z 1 score formula is more precise—with an accuracy rate of 88.2 percent in 2007, one year before bankruptcy—than the Z2 model, which gives a prediction of 83.33 percent for the cutoff zone <0.7, while the Z 3 score reaches 80 percent prediction for the < 0.5 zone. Five and four star hotels show a higher bankruptcy risk than 4-star hotels, while the smaller risk is depicted in 2-star hotels.This paper fulfils the identified need to predict the certainty of bankruptcy among enterprises in the distress zone.
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Sajjan, Rohini. "PREDICTING BANKRUPTCY OF SELECTED FIRMS BY APPLYING ALTMAN’S Z-SCORE MODEL." International Journal of Research -GRANTHAALAYAH 4, no. 4 (2016): 152–58. http://dx.doi.org/10.29121/granthaalayah.v4.i4.2016.2767.
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Predication of Bankruptcy is critical task. Early stage of identification of likelihood of solvency may avoid evils in the near future & may shelter the firm from Bankruptcy situation. Bankruptcy of organizations can be predicated by using Altman’s Z-Score Model. This study tries to apply the model to understand the likelihood of Bankruptcy of selected firms for past 5 years from 2011 to 2015 which are listed in BSE & NSE. Companies are selected from manufacturing & non-manufacturing sector. The study reveals that none of the companies completely belongs to Safe Zone except for few years. Most of the firms are in Distress Zone which clearly indicates that these firms may go Bankrupt in near future.
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Putri, Hana Tamara. "The Prediction of Bankruptcy With Altman Z-Score and Springate S-Score Models In Sharia Banks Period 2012-2017." J-MAS (Jurnal Manajemen dan Sains) 4, no. 2 (2019): 276. http://dx.doi.org/10.33087/jmas.v4i2.108.
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The Background of this research is to know and to analyze the prediction of company bankruptcy of BUMN Syariah Banks in BEI periods 2012-2017 which focuses object are three companies which have all criteria in analysis by method Z-score Altman and S-Score Springate. As we know, the goal of company is not being bankrupt so that the company needed a method to predict the bankruptcy as soon as possible. This reserch uses Z-Score Altman and S-Score Springate, this methods used to analize financial statements. Goals of this research is to know the potential of bankruptcy, rate of bankruptcy, and insolvensy ranking of BUMN Syariah Banks in BEI periods 2012-2017. Three companies taken as object are Bank Mandiri Syariah, Bank BNI Syariah and Bank BRI Syariah, analyze by using financial statements by the year 2012 to 2070 to find values of variables and then calculated the value of each variable into Altman’s Formula and Springate’s Formula to produce the score.
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Milić, Dragan, Dragana Tekić, Tihomir Novaković, Vladislav Zekić, Milana Popov, and Zlata Mihajlov. "Credit Rating of Agricultural and Food Companies in Vojvodina." Contemporary Agriculture 71, no. 1-2 (2022): 51–56. http://dx.doi.org/10.2478/contagri-2022-0008.
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Summary The purpose of this paper is to examine different methods of creditworthiness assessment and bankruptcy prediction in the case of agricultural and food companies in Vojvodina, Serbia. The analysis performed was based on the 2015–2019 financial reports of micro-sized, small-sized and medium-sized agricultural and food companies considered. A total of two models were applied in this study: the Altman’s Z’-score model and the Kralicek’s Quick test. The Altman’s Z’-score model results obtained indicate that the micro-sized agricultural companies were at greater risk of bankruptcy, whereas the small- and medium-sized companies were found stable. However, the Kralicek’s Quick test results obtained show that all the agricultural companies considered had good financial stability and solid businesses. The Altman’s Z’-score model results obtained for the food companies considered indicate that the micro- and small-sized food companies were endangered, whereas the medium-sized food companies were not at risk of bankruptcy. Moreover, the Kralicek’s Quick test results obtained show that all the food companies considered operated successfully with no risk of bankruptcy.
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Ntoung, Lious Agbor Tabot, Felix Puime Guillén, and Miguel Ángel Crespo Cibrá. "The effectiveness of the Spanish banking reform application of Altman’s Z-Score." Risk Governance and Control: Financial Markets and Institutions 6, no. 4 (2016): 40–47. http://dx.doi.org/10.22495/rcgv6i4art6.
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The recent financial crisis which causes bankruptcy around the world, Spain was placed at the top list because of the crucial state of its banking. This lead to a call to ensure adequate bank capitalization and reduce uncertainty regarding the strength of their balance sheets. In the light of recent event, the important of knowing the financial position of banks is imperative to shareholders. Thus, the aim of this study is to affirm the validity of Altman Z”-Score model as a predictors of the uncertainty regarding financial sector in Spain. This study takes into consideration two periods: before the banking reform and after the banking reform. It requires 30 financial institutions in Spain both big as well as small. Ratio analysis was carried out on the 30 banks before and after the reforms for five years prior to their bankruptcy or nationalisation as the Z” Score model has predictive power of up to five years before the reforms.
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Junaeni, Irawati. "Stock Prices Predicted by Bankruptcy Condition?" Binus Business Review 9, no. 2 (2018): 105–14. http://dx.doi.org/10.21512/bbr.v9i2.4103.
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This research had two objectives. First, it determined the prediction of the method of Altman Z-Score whether it could classify banking positions, bankruptcy, or financial distress in the go-public bank in Indonesia Stock Exchange. Second, it was to know the influence of value position of Altman Z-Score on the stock price. The population was 84 banking company listed on the Indonesia Stock Exchange in 2010-2015. The sampling method was purposive sampling. Moreover, data analysis method used was a simple regression analysis. For data processing, it used software Eviews 8. The Z-Score calculations predict the potential bankruptcy of go-public bank in 2010-2015. All results show that Z-Score has the small score of 1,81. It can be said there is a potential bankruptcy. For t-test, it can be concluded that Z-Score has the positive and significant effect on the stock price. The ability of Z-Score values in explaining the stock price is 95,50% while the remaining 4,50% is influenced by other variables that are not analyzed in the research. With some weaknesses of Altman’s Z-Score model, this research has the implication for management bank. It improves the financial performance for the future to avoid opportunity bankruptcy prediction. The results show how the effect of bankruptcy on banking stock prices.
Dissertations / Theses on the topic "Altman’s Z- score"
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Yee, Hun Leek. "Predicting Financial Distress Amongst Public Listed Companies in Malaysia using Altman’s Z-Score Model and Auditors’ Opinion on Going Concern." Thesis, Curtin University, 2018. http://hdl.handle.net/20.500.11937/75450.
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The framework used in this study, to predict financial distress amongst the Public Listed Companies (PLCs) in Malaysia, utilizes the 5-variables Altman’s Z-Score Model as the base model and the Auditors’ Opinion on going concern as the 6th variable. Multiple Discriminant Analysis (MDA) and Logistic Regression Analysis (LRA) have been employed, and the revised 6-variables model developed using LRA has the highest accuracy to predict financial distress amongst the PLCs in Malaysia.
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Akhmetova, Amira, and Yulia Batomunkueva. "Board Composition and Financial Distress : An Empirical evidence from Sweden and Denmark." Thesis, Umeå universitet, Företagsekonomi, 2014. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-90935.
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Recent failure of such companies as Enron, Worldcom and Parmala showed that there are internal reasons contributing to company’s financial distress. Financial distress is a condition when a company fails to meet its debt obligations. Board of directors is liable for long-term decisions and their ineffective work in monitoring and controlling management can influence companies’ performance. With that in mind, in this degree project, we would like to answer the following research question: “What is the relationship between characteristics of Board and probability of financial distress, measured by Altman’s Z-score models in Sweden and Denmark?” The epistemological and ontological choices for our study were positivism and objectivism with deductive approach. We have calculated Z-scores of Swedish and Danish companies in order to detect distressed and healthy companies. Further on, the information about board composition in each company was collected; mainly we were interested in board independence, board size, board ownership, COB ownership, CEO duality and employee representatives. In order to examine if there is a relationship between board composition and financial distress, we have done Multiple and Binary Regression analyses. Based on the results we can state that board independence, board ownership and employee representatives and market capitalization (control variable) have significant relationship with probability of financial distress. Our study is interesting since we have looked at employee representatives, as a board characterectic that is specific for Nordic countries and that was not studied before. In addition, we have found that there is no CEO duality in Sweden and Denmark, since all companies in our sample followed the Companies’ Acts. COB ownership, the additional variable we wanted to test and board size have shown no significant relationship.
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Fang, Yiwen. "Sustainability information network (SIN) and corporate financial distress." Thesis, Queensland University of Technology, 2021. https://eprints.qut.edu.au/211478/1/Yiwen_Fang_Thesis.pdf.
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In this thesis I examine the relationship between corporate sustainability information networks (SIN) and financial distress. I propose that firms that are more central in the SIN have better access to key sustainability information which in turn results in lower financial distress. Using 5,521 in-network firms and their propensity scored matching (PSM) firms over the five-year period 2015-2019, I find strong support for my hypothesis. The findings suggest that SINs provide an important role in reducing financial distress.
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Ondrušková, Lucia. "Analýza vybraného podnikatelského subjektu pomocí vybraných metod." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2016. http://www.nusl.cz/ntk/nusl-255781.
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Predkladaná diplomová práca sa zaoberá kritickou analýzou súčasnej situácie firmy Gorenje Slovakia, ktorá na slovenskom trhu predáva domáce spotrebiče. Analýza externého prostredia odhaľuje možné príležitosti a hrozby na trhu. Na druhej strane, analýza interného prostredia prisieva k určeniu si silných a slabých stránok, a taktiež finančného zdravia spoločnosti. Výsledky analýz sú zosumarizované v SWOT analýze. V poslednom rade sú navrhnuté odporúčania a návrhy pre zlepšenie súčasnej situácie spoločnosti.
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Aitova, Diana, and Ams Gabriella Krohn. "Är de kända Altmans Z-scoremodellerna lämpade på den svenska turistmarknaden och vilka varningssignaler kan utläsas för företagsmisslyckande? : En kvantitativ forskning över svenska onoterade små och medelstora turistföretag och tecken på konkurs." Thesis, Södertörns högskola, Företagsekonomi, 2020. http://urn.kb.se/resolve?urn=urn:nbn:se:sh:diva-43633.
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Research question: This thesis analyzes the relationship between Altman’s Z’-and Z’’ score model in order to investigate the suitability of the models on the swedish small and medium companies during 2015-2019. Furthermore, analysis of previous research key figures has been examined in more detail to identify which of the individual key figures can be categorized as an early warning signal. Purpose: The purpose with this study is to explore which and when early warning signals can be read in annual reports between inactive and active Swedish tourist companies and to investigate the relationship between the accuracy of bankruptcy prediction models between active and bankrupt companies. Method: The study uses a quantitative method with a deductive approach, z-test and onesided analysis of variance ANOVA to analyze the accuracy of bankruptcy prediction models and identify how the key figures differ between active and inactive companies. Conclusion: The study shows that Altman's Z 'and Z' scores predict bankruptcies better than specify continued operations, are best suited for active companies and have the highest accuracy one year in advance than a longer period. On the other hand, 7 out of 15 key figures examined have identified significant average value differences between active and bankrupt companies, where some had a higher value for bankrupt companies and others had lower ones.<br>Problemställning: I denna studien har relationssamband mellan Altmans Z’- och Z’’- scoremodell analyserats för att undersöka hur modellerna lämpar sig på den svenska små- och medelstora konkur-respektive aktiva turistföretag mellan 2015-2019. Ytterligare har analys av tidigare forsknings nyckeltal undersökts närmare för att identifiera vilka av de enskilda nyckeltalen kan kategoriseras som en tidig varningssignal. Syfte: Studiens avsikt är att utforska vilka och när tidiga varningssignaler kan utläsas i årsredovisningar mellan inaktiva och aktiva svenska turistföretag samt undersöka relationssambandet gällande konkursprediktionsmodellers träffsäkerhet mellan aktiva- och konkursföretag. Metod: I studien används en kvantitativ metod med en deduktiv ansats, z-test och ensidig variansanalys ANOVA för att analysera konkursprediktionsmodellers träffsäkerhet samt identifiera hur nyckeltalen skiljer sig mellan aktiva och konkursföretag. Slutsats: Studien visar att Altmans Z”och Z’-score förutser konkurser bättre än preciserar fortsatt verksamhet, lämpar sig bäst på aktiva företag samt har den högsta träffsäkerhet ett år i förväg än längre period. Däremot har 7 av 15 undersökta nyckeltal identifierat signifikanta medelvärdesskillnader mellan aktiva och konkursföretag där några hade ett högre värde gällande konkursföretag och andra hade lägre.
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Onyiri, Sunny. "Predicting Financial Distress using Altman's Z-score and the Sustainable Growth Rate." Thesis, Northcentral University, 2015. http://pqdtopen.proquest.com/#viewpdf?dispub=3669729.
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<p> Due to the increase in corporate bankruptcy, financial distress studies have flourished since 1968. Firms do find themselves in financially distressful situations because of several factors including changing economic environment such as a decrease in aggregate demand, an increase in the cost of borrowed funds, and changes in government regulation. In addition to the Altman's z-score model, the sustainable growth rate (SGR) is another tool that is used primarily for financial planning. The problem with Altman's z-score model is that it does not consider whether a firm can be financially distressed or not if the sustainable growth rate of the firm is in fact higher than the growth rate of the firm's reported revenues. The purpose of this quantitative study was to investigate the efficacy of using ltman's z-score in forecasting financial distress of a firm when the sustainable growth rate was higher than the growth rate of the reported revenues. The sample for this study was drawn from all non-financial firms traded on the NYSE. The research question was investigated using two group design in two phases. Phase 1 involved the calculation of the sustainable growth rate (SGR), the growth rate of reported revenues, and the calculation of Altman's z-score. The Altman's z-score of the two groups were compared using Mann-Whitney <i>U</i> test to determine whether a statistically significant difference exists in the z-score. Phase 2 involved the correlation between the values of SGR and the values of Altman's z-score to determine if there was a statistically significant relationship between the two scores. The result of this research indicates that the Alman's z-score and the sustainable growth rate are conceptually independent and both can be used to ascertain whether a firm is financially distressed or not. In addition, result of this study provide practical application that could help management of firms reach important financial and managerial decisions. While the result of this study provided useful information and added to existing knowledge on financial distress, additional research using more than one year of financial data is recommended in order to confirm the results of this study.</p>
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Setoaba, Mabule. "A comparative study between Altman Z-Score and verifier." Diss., University of Pretoria, 2017. http://hdl.handle.net/2263/59769.
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The identification of reliable early warnings signs which encompass qualitative and quantitate
inputs to business distress and failure prediction could reduce the incidence of business failure
if companies take corrective action early enough as the signals of distress emerge.
The concept of verifier determinants as early warning signs of business failure and distress as
introduced by Holtzhauzen & Pretorius (2013) has largely been theoretical and unexamined
in terms of the methodology's ability to identify business distress. The performance of the
model is tested against the well-established Altman Z-Score model of prediction.
This study tests the consistency of the classification of companies as falling, grey and nonfailing
by applying the Altman Z-Score model and the verifier determinants theory to a sample
38 JSE listed companies. 19 Suspended companies were selected and matched with another
19 companies of similar size and operating in the same industries.
The consistency of the classifications was tested via a simple measure of percentage
agreement using a cross tabulation, then a Cohen Kappa coefficient was applied to test for
agreement over and above agreement by chance. The study further applied a Spearman
correlation coefficient to determine the level of association between the results produced by
the two models.
The findings of the study indicate a statistically significant association between the Altman ZScore
and the aggregate score of default as calculated through the application of verifier
determinants theory. The study further identifies two verifier determinants (i) Late submission
of financial information and (ii) Underutilisation of assets which have the strongest association
with the Altman model and overall aggregate score of default. We argue that these individual
verifier determinants could be used as a proxy for the overall model to monitor the risk of
company distress<br>Mini Dissertation (MBA)--University of Pretoria, 2017.<br>zk2017<br>Gordon Institute of Business Science (GIBS)<br>MBA<br>Unrestricted
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Rosário, João David Claro Ferreira do. "Credit risk and banking activities." Master's thesis, Instituto Superior de Economia e Gestão, 2016. http://hdl.handle.net/10400.5/12580.
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Mestrado em Finanças<br>O risco de crédito para o sector bancário é um assunto muito importante. Nesse sentido, é primordial adquirir ferramentas para medir este risco com algum grau de segurança de modo a ser possível tomar as decisões corretas sobre o crédito cedido a clientes. O objetivo deste trabalho é compreender o quão importante é o risco de crédito para as instituições financeiras e apresentar uma forma de o medir associado com o crédito a empresas, analisando um modelo de score para avaliar que o mesmo seja avaliado. Este trabalho também descreve as atividades desenvolvidas nos principais departamentos de uma instituição bancária, de acordo com um estágio que teve lugar no Banco BIC, desenvolvendo desta forma uma revisão da literatura ao risco de crédito, uma descrição sobre a evolução da banca, modelos de avaliação assim como também uma análise a uma empresa, utilizando o modelo Z-Score, comparando o resultado obtido com a classificação fornecida por uma agência de rating. Os resultados provaram que o modelo em análise foi eficaz, proporcionando uma avaliação, dentro das suas limitações, de acordo com a classificação fornecida por esta agência de rating.<br>Credit risk in banking industry is a very important subject. Therefore, it is important to acquire tools to measure it, with some degree of reliability, in order to be possible to take the correct decisions regarding client loans. The objective of this final project is to understand the importance of the credit risk to financial institutions and to present a way of measuring this risk associated with loans to companies, analysing a score model to evaluate this risk. This project also describes the activities developed by the main departments of a banking institution in accordance to an internship which took place in Banco BIC, developing this way a literature review to credit risk, banking evolution and score models as well as analysing a company using the Z-Score model, comparing the results obtained with the rating provided by a rating agency. The results proved that the model under analysis was effective, providing a reliable output within its limitations, correspondingly to the rating provided by this rating agency.
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Shi, Yin. "Bankruptcy prediction analysis: application of altman z-score approach in airline industry." Doctoral thesis, Universitat Rovira i Virgili, 2022. http://hdl.handle.net/10803/673428.
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La predicció de fallides va reunir un interès creixent en la investigació des de 1968, quan Altman va introduir el model
innovador de predicció de fallides: Altman Z-score. El transport aeri va ser una de les indústries de més ràpid
creixement, oferint més de 80 milions de llocs de treball a tot el món i contribuint amb un 8% al producte interior brut.
La indústria aèria europea està molt fragmentada perquè la majoria dels membres de la Unió Europea consideren
important tenir una companyia aèria nacional. No obstant això, més de la meitat dels beneficis de tota la indústria són
compartits per quatre grans companyies aèries, la qual cosa deixa altres companyies aèries en una situació difícil. És
crucial determinar el risc de dificultat financera per a les companyies aèries, ja que pot proporcionar missatges d'alerta
primerenca sobre aspectes que poden ser vists i abordats pels executius i directius.<br>La predicció de fallides va reunir un interès creixent en la investigació des de 1968, quan Altman va introduir el model
innovador de predicció de fallides: Altman Z-score. El transport aeri va ser una de les indústries de més ràpid
creixement, oferint més de 80 milions de llocs de treball a tot el món i contribuint amb un 8% al producte interior brut.
La indústria aèria europea està molt fragmentada perquè la majoria dels membres de la Unió Europea consideren
important tenir una companyia aèria nacional. No obstant això, més de la meitat dels beneficis de tota la indústria són
compartits per quatre grans companyies aèries, la qual cosa deixa altres companyies aèries en una situació difícil. És
crucial determinar el risc de dificultat financera per a les companyies aèries, ja que pot proporcionar missatges d'alerta
primerenca sobre aspectes que poden ser vists i abordats pels executius i directius.<br>Bankruptcy prediction gathered increasing research interest since 1968 when Altman introduced the breakthrough
bankruptcy prediction model—Altman Z-score. Air transport was one of the fastest growing industries, offering more
than 80 million jobs across the world and contributing 8% to gross domestic product. The European airline industry is
highly fragmented because most members of the European Union consider it is important to have a national air carrier.
However, over the half of the profit of the whole industry are shared by four big airlines which lefts other airlines in a
difficult situation. It is crucial to determine financial distress risk for airlines since it can provide early-warning
messages on aspects that can be seen and addressed by executives and managers.
The COVID-19 pandemic caused immense disruption to the global economy and resulted in a dramatic decrease in
demand for air travel, which left global air carriers struggling for survival in the worst situation they have ever
encountered. In recent years, the concept of corporate sustainability has increasing impact in the field of business
world.
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KITTUR, ASHA HARSHAVARDHAN. "Effectiveness of the Altman Z-Score model : Does the Altman Z-Score model accurately capture the effects of Non-Performing Assets (NPA) in the Indian banking sector?" Thesis, Linnéuniversitetet, Institutionen för ekonomistyrning och logistik (ELO), 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-86144.
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The aim of this study is to measure the effectiveness of Altman’s Z-Score model using Non-performing assets (NPA) as a benchmark stability indicator. To do that, this paper examines if Altman’s Z Score Models capture the decline in financial health of the banks caused by the NPAs, using a two-fold analysis i.e., in advance through prediction and when the distress period is ongoing. The findings of this paper would suggest that: 1. During the distress period: The Z-Scores only marginally capture the distress caused by the NPAs, which is in line the findings of Almamy et al that the predictive ability of the model goes down during the crisis period. 2. For the future: The results of the statistical t-tests indicate that, the Z-Scores do not have the predictive ability to capture the future NPAs. Two different models that are developed by Altman - one for non-manufacturing firms and the other for the emerging markets, are used to test, if one model is more suitable than the other to the Indian banking sector. The findings of this paper suggest that, due to the uniqueness of the Indian banking sector during the NPA crisis, the ‘Emerging market model’, does not produce any significantly better results. Therefore, there is further scope to develop a tailor-made model suitable to the Indian banking sector.
Books on the topic "Altman’s Z- score"
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Mutter, J. How reliable is Altman's Z score model and what are the merits of alternative approaches to corporate failure prediction?. Oxford Brookes University, 1996.
Find full textBook chapters on the topic "Altman’s Z- score"
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Pérez-Pons, María E., Javier Parra, Guillermo Hernández, Jorge González, and Juan M. Corchado. "Machine Learning and Financial Ratios as an Alternative to Altman’s Z-Score Bankruptcy Model in Spanish Companies." In Decision Economics: Minds, Machines, and their Society. Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-75583-6_13.
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Shree, Nithya, and Durai Selvam. "Prediction of bankruptcy of Indian manufacturing companies (construction) using Zmijewski model and Altman Z score." In Advances in Management Research. Routledge, 2022. http://dx.doi.org/10.4324/9781003366638-9.
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Holpus, Hardo, Ahmad Alqatan, and Muhammad Arslan. "Investigating the Viability of Applying a Lower Bound Risk Metric for Altman’s z-Score." In 21st Century Approaches to Management and Accounting Research [Working Title]. IntechOpen, 2021. http://dx.doi.org/10.5772/intechopen.97433.
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The study aimed to build a risk metric for finding the lower boundary limits for Altman’s z-score bankruptcy model. The new metric included a volatility of Altman’s variables and predicted the riskiness of a firm bankrupting in adverse situations. The research examined whether the new risk metric is feasible and whether it provides satisfying outcomes compared to Altman’s z-score values during the same period. The methods to conduct the analysis were based on Value at Risk methodology. The main tools used in constructing the model were Monte Carlo simulation, Lehmer random number generator, normal and t-distribution, matrices and Cholesky decomposition. The sample firms were selected from FTSE 250 index. The important variables used in the analysis were all Altman’s z-score variables, and the period under observation was 2001–2007. The selected risk horizon was the first quarter of 2008. The first results were promising and showed that the model does work to the specified extent. The research demonstrated that Altman’s z-score does not provide a full and accurate overview. Therefore, the lower bound risk metric developed in this research, produces valuable supplementary information for a well-informed decision making. To verify the model, it must be back- and forward tested, neither of which was carried out in this research. Furthermore, the research elaborated on limitations and suggested further improvement options for the model.
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Anderson, Raymond A. "Business Credit." In Credit Intelligence & Modelling. Oxford University Press, 2021. http://dx.doi.org/10.1093/oso/9780192844194.003.0004.
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This chapter covers modelling of business-credit risk, whether retail or wholesale. (1) Risk 101—i) data sources—variations by firm or loan size (financial statements, traded securities prices, environmental assessments); ii) assessment tools—rating agency grades, business-report scores, public and private firm, hazard, portfolio, and exposure models; iii) rating grades—internal and external (Moody’s, Standard and Poor (S&P), Fitch; S&P provided further insights); iv) small and medium enterprises (SME) lending—including reviewing principals in the personal capacities. (2) Financial-ratio scoring—i) pioneers—including Altman’s Z score and Moody’s commercially successful RiskCalc; ii) predictive ratios—that have appeared; iii) agency usage—for the development of public- and private-firm models; iv) Moody’s RiskCalc—basics and results when first launched; v) non-financial factors—those typically considered, and how objectivity can be improved. (3) Forward-looking data—most provided by human judgment, even the ‘wisdom of the crowd’ inherent in market prices. Rating transitions and functional versus reduced-form models are also used.
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Piñeiro Sanchez, Carlos, and Pablo de Llano-Monelos. "Financial Risk and Financial Imbalances." In Emerging Tools and Strategies for Financial Management. IGI Global, 2020. http://dx.doi.org/10.4018/978-1-7998-2440-4.ch001.
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The study of the financial imbalances of companies is a common topic for academics and practitioners because bankruptcy affects financial stability and modifies the investors' behavior. Since the 1960s, financial ratios have been used as diagnostic tools and also as independent variables within models aimed at quantifying firms' financial risk (e.g., Altman's Z-Score). In parallel, the strategic theory has developed theoretical constructs to explain why competitiveness is empirically heterogeneous. The resource-based view argues that companies can outperform rivals if they manage scarce, expensive, and hard-to-imitate resources. Ultimately, outperformers should be able to avoid (or overcome) financial imbalances. This chapter intends to analyze whether IT resources modify firm performance and financial risk. To do that, the authors collected data from a random sample of Galician SMEs, combining questionnaires, focused interviews, and public financial data. Hypotheses are explored by applying parametric statistical methods.
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Teixeira, Nuno Miguel Delicado, Rui Brites, Inês Lisboa, and Rosa Galvão. "Determinants of Portuguese Exporting Companies' Liquidity Levels." In Advances in Human Resources Management and Organizational Development. IGI Global, 2022. http://dx.doi.org/10.4018/978-1-6684-5666-8.ch002.
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This paper aims to study the variables that influence, positively or negatively, treasury management and liquidity levels required for the normal working of the analyzed companies. It was concluded that several variables studied showed significant statistical relationships with the companies' liquidity level and types of relationships that matched the initial expectations of the study. Thus, the weight of retained net income plus non-cash expenses in total net assets; the Altman discriminant analysis Z score, representative of the level of companies' financing constraints; the size of total net assets; the weight of current assets minus cash and cash equivalents in total net assets and operating profitability, showed relevant relationships with the liquidity level and can be considered determinants of this variable.
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Voloshyna, Oksana. "METHODS OF BANKRUPTCY PREDICTION AT THE ENTERPRISES UNDER CONDITIONS OF QUARANTINE RESTRICTIONS DUE TO THE COVID-19 PANDEMIC." In Theoretical and practical aspects of the development of modern scientific research. Publishing House “Baltija Publishing”, 2022. http://dx.doi.org/10.30525/978-9934-26-195-4-3.
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The problem of bankruptcy prevention is growing in importance under conditions of the decline of economic growth and quarantine restrictions caused by the COVID-19 pandemic, which has significantly affected the domestic economy. In the second reading, the Ukrainian Parliament adopted amendments to the Code of Ukraine on the Bankruptcy Procedure, which banned moratorium on bankruptcy initiation by the creditors. Thus, there was approved “Draft Law on Amendments to Certain Legislative Acts to Regulate Certain Issues of Bankruptcy Procedures for the Period of Implementation of the Measures Aimed at Preventing the Emergence and Spread of the COVID-19 Pandemic” No 4220. This moratorium was introduced in the framework of measures for business support due to the COVID-19 pandemic. Quarantine restrictions caused by the COVID-19 pandemic have affected many businesses throughout the world. First of all, this is due to strict quarantine measures imposed by the governments of many countries: closure of shopping and entertainment centers, a ban on all public events, restrictions on the movement both within the country and when crossing its borders, reduction of production (due to the establishment of limits for the simultaneous stay of workers in one room), etc. Quarantine has ruined consumer sentiment and almost halted several industries including retail, hotel and restaurant business, air travel. The amount of budget revenues has decreased. As a result of quarantine, Ukrainian companies have frozen investments and production chains, and some of them are on the verge of bankruptcy. The main economic sign of bankruptcy is reduced to a single point. It is inability of the enterprise to meet the requirements of creditors. However, in order to avoid numerous bankruptcies on insignificant debts, the minimum amount of debt is determined, at which a bankruptcy case can be initiated. Macroeconomic efficiency of the institution of bankruptcy directly depends on the systemic nature of the relevant fragment of the national legislation, availability of the detailed representative economic statistics and the level of conceptual development of effective anti-crisis regulation. At the level of microeconomics, bankruptcy means not just stopping the local production process, i.e. the loss of a sustainable source of permanent income and social security. And at the level of macroeconomics there is the opposite situation; bankruptcy means rehabilitation of production from inefficient forms of its organization and inefficient management, overcoming cyclical recession and modernization of the technological base of production. A modern approach to the study of bankruptcy is associated with the definition of objective economic signs of corporate bankruptcy and specific signs of financial insolvency of the enterprise, assessment of the effectiveness of basic legal procedures for bankruptcy (supervision, external management, bankruptcy proceedings, and amicable settlement). Financial preconditions for insolvency and bankruptcy of the enterprise are analyzed in accordance with Methodical recommendations on detection of signs of insolvency of the enterprise and signs of concealment of bankruptcy, fictitious bankruptcy or bringing to bankruptcy; Methodology of in-depth analysis of the financial and economic condition of insolvent enterprises and organizations. Financial statements are the sources of information for analysis and detection of signs of bankruptcy. To predict the risk of bankruptcy, it is necessary to be guided by regulatory sources, data of accounting, statistical, operational accounting and reporting. Necessary information can also be obtained from documentary inspections, audits, orders, directives, economic and legal materials (contracts). To study the results of financial and economic activities of the object of study there can be used accounting data, which contains extensive analytical information. According to primary documents, it is possible to establish the causes of overspending, payment of fines, perpetrators, determine the legality and appropriateness of business transactions. The main sign of bankruptcy is inability of the company to comply with creditors’ claims within three months from the date of payment. After this period, creditors have the right to apply to the arbitral tribunal to declare the debtor company a bankrupt. Bankruptcy is the result of interaction of internal and external factors. Due to the limitations of the COVID-19 pandemic, 1/3 of the business destruction is associated with internal factors and 2/3 with external factors. Bankruptcy characterizes realization of catastrophic risks of the enterprise in the course of its financial activity, as a result of which it is unable to meet the requirements set by creditors and meet obligations to the budget. Among a wide range of methods used to determine the characteristics of various phenomena and processes, to identify the features of development, to study the dynamics of changes at the enterprises under conditions of the threat and development of crisis, there can be distinguished the main ones: expert (expert assessments); research and statistical; analytical; method of analogues. The whole set of methods for assessing the state of the enterprise is based on three main approaches, which include: the use of a system of indicators and informal indicators (criteria and features); setting the maximum number of indicators in different areas of the enterprise; creation of a separate system of integrated indicators. In the practice of analysis and assessment of the enterprise state the most common approach is the one that involves the use of a system of indicators and informal indicators. Integrated factor models developed using multidimensional multiplicative analysis are often used to assess the probability of bankruptcy and the level of creditworthiness of the enterprise. Bankruptcy forecasting methods based on the use of financial ratios are as follows: Two- and five-factor models for estimating the probability of bankruptcy based on Altman’s “Z-score”; Model of Roman Lis, W. Beaver; Method of rating assessment of financial condition (rating number); R – bankruptcy risk prediction; Taffler’s prediction model; Fulmer’s model; Springgate model; Generalized model developed on the basis of discriminant function; PAS-ratio. Integrated factor models of E. Altman, Lis, Taffler, Tishau and others are often used to assess the probability of bankruptcy and the level of creditworthiness of the enterprise (Table 1), developed using multidimensional multiplicative analysis.
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"A 50-Year Retrospective on Credit Risk Models, the Altman Z-Score Family of Models, and Their Applications to Financial Markets and Managerial Strategies." In Corporate Financial Distress, Restructuring, and Bankruptcy. John Wiley & Sons, Inc., 2019. http://dx.doi.org/10.1002/9781119541929.ch10.
Full textConference papers on the topic "Altman’s Z- score"
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Zainuddin, Zaemah, Afiruddin Tapa, and Adilah Irdahwani Abdul Rahim. "Examine the financial health of the listed technology companies in Malaysia using Altman’s Z-score test." In PROCEEDINGS OF THE 3RD INTERNATIONAL CONFERENCE ON APPLIED SCIENCE AND TECHNOLOGY (ICAST’18). Author(s), 2018. http://dx.doi.org/10.1063/1.5055546.
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Mugozhi, Farirepi, and Anyway Ngirazi. "AN ASSESSMENT OF THE APPLICATION AND THE CORPORATE FAILURE PREDICTIVE VALUE OF ALTMAN’S Z-SCORE MODEL IN ZIMBABWE." In Annual International Conference on Accounting and Finance (AF 2016). Global Science & Technology Forum ( GSTF ), 2016. http://dx.doi.org/10.5176/2251-1997_af16.79.
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MERKEVIČIUS, E. "FORECASTING OF BANKRUPTCY WITH THE SELF-ORGANIZING MAPS ON THE BASIS OF ALTMAN'S Z-SCORE." In Computer Aided Methods in Optimal Design and Operations. WORLD SCIENTIFIC, 2006. http://dx.doi.org/10.1142/9789812772954_0018.
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Kiaupaite-Grushniene, Vaiva. "Altman Z-Score Model for Bankruptcy Forecasting of the Listed Lithuanian Agricultural Companies." In 5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016). Atlantis Press, 2016. http://dx.doi.org/10.2991/icaat-16.2016.23.
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Liodorova, Julija, and Irina Voronova. "Z-score and P-score for bankruptcy fraud detection: a case of the construction sector in Latvia." In Contemporary Issues in Business, Management and Economics Engineering. Vilnius Gediminas Technical University, 2019. http://dx.doi.org/10.3846/cibmee.2019.029.
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To protect investment and ensure repayment of payables, recent studies have focused on identifying the relationships between company bankruptcy and internal fraud. The P-score model that is based on the most popular Altman Z-score model has been developed to indicate the manipulation of financial statements. Purpose of the study is to determinate the accuracy and the feasibility of P-score and Z-score models to detect fraudulent bankruptcy in regional conditions, based on reports of the Latvian construction companies that failed due to fraud, and during the verification of other known data. Research methodology is based on the background studies of P-score testifying, applying this approach to the Latvian condition. The present study analyzes the behaviour of the two models in identifying distress and fraud. To testify the results of the study, the authors use the financial analysis methods, comparison, statistical and quantitative research methods. Findings have shown the possibility of using the P-score and Z-score technique for bankruptcy fraud detection at the Latvian companies, based on the construction sector samples. The accuracy of the method is above 80%. Research limitations – acquisition a large amount of data on companies that are in the process of analytical studies on the recognition of their insolvency and having signs of fraud is not possible due to the confidentiality of information. Practical implications – the results of the study may be applicable to the audit of the company, investment reliability assessment, partnership evaluation and economic examination to detect fraud. Originality/Value of the study is the first test of practical implication of P-score model in Latvia and the Baltic countries on the samples of small and medium-sized construction companies. The authors propose improving the coefficients of the P-score model taking into account the requirements for financial statements in Latvia
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Ch, Flourien Nurul, and Lies Zulfiati. "Financial Distress Analysis with Altman Z Score Method and Value of SOEs Listed on BEI." In Proceedings of the 5th Annual International Conference on Accounting Research (AICAR 2018). Atlantis Press, 2019. http://dx.doi.org/10.2991/aicar-18.2019.11.
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Barbullushi, Erjole, and Blerta Dragusha. "ALTMAN Z-SCORE REVISED MODELS AS EARLY WARNING SYSTEMS FOR BANKRUPTCY EVALUATION OF ECONOMIC ENTITIES ." In 4th International Scientific Conference: Knowledge based sustainable economic development. Association of Economists and Managers of the Balkans, Belgrade, Serbia et all, 2018. http://dx.doi.org/10.31410/eraz.2018.873.
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Rahayu and Muhammad Ridwan. "Analysis of Bankruptcy Prediction of Regional Development Banks (BPD) using the Altman Z-Score Method." In Malaysia Indonesia International Conference on Economics Management and Accounting. SCITEPRESS - Science and Technology Publications, 2019. http://dx.doi.org/10.5220/0009855100002900.
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Almamy, Jeehan. "An Extension of Altman's z-Score Model as an Analytical Tool to Predict the Financial Health of UK Companies." In Eighth Saudi Students Conference in the UK. IMPERIAL COLLEGE PRESS, 2015. http://dx.doi.org/10.1142/9781783269150_0012.
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Hundal, Shab, and Anne Eskola. "Financial accounting manipulations and bankruptcy likelihood: A study of Nordic banks." In Corporate governance: Fundamental and challenging issues in scholarly research. Virtus Interpress, 2021. http://dx.doi.org/10.22495/cgfcisrp13.
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The phenomena of accounting manipulations and bankruptcy likelihood have always been a topic of interest among researchers. The key objective of the current study is to examine the impact of fraudulent accounting practices on the likelihood of bankruptcy, and the performance of firms. Beneish M-score model and Jones model have been applied to evaluate earnings quality, whereas the Altman Z-score model has been used to analyze the level of financial distress. Based on the analysis of secondary data collected from 33 Nordic banks for the period 2011–2018, the findings disclose that Z-score of most of the sample banks has been found to be relatively high thus representing their high level of financial health. The study does not rule out potential earnings management measures applied by the sample banks. Furthermore, earnings manipulations increase the bankruptcy likelihood, especially in case of larger banks. The financial data manipulation practices artificially enhance the financial performance of banks, however, in a broad perspective; such manipulations can trigger potential financial distress