A STUDY OF ALTMAN Z-SCORE BANKRUPTCY MODEL FOR ASSESSING BANKRUPTCY RISK OF NATIONAL STOCK EXCHANGE-LISTED COMPANIES
| Autor: | Mohammad Asif, Ashish Saxena, Shashank Bhardwaj, Sadhana Tiwari, Sharad Chaturvedi |
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| Jazyk: | angličtina |
| Rok vydání: | 2024 |
| Předmět: | |
| Zdroj: | Proceedings on Engineering Sciences, Vol 6, Iss 2, Pp 789-806 (2024) |
| Druh dokumentu: | article |
| ISSN: | 2620-2832 2683-4111 |
| DOI: | 10.24874/PES06.02A.006 |
| Popis: | This study aimed to predict the bankruptcy risk of companies listed on the National Stock Exchange (NSE) in India using the Altman Z-score model. By examining the impact of variable factors such as market value equity/book value of total liabilities, retained earnings/total assets, working capital/total assets, earnings before interest and taxes/total assets, and sales/total assets, the research sought to assess their influence on the financial condition of listed companies. The Altman Z-score model is a widely accepted tool for predicting bankruptcy risk and has been utilized in various industries across different countries. The model comprises five financial ratios that capture a company's liquidity, profitability, leverage, solvency, and activity. By analyzing these ratios, the model calculates a composite Z-score, which can be used to classify companies into different risk categories. Using a sample of NSE-listed companies, this study employed the Altman Z-score model to predict bankruptcy risk and examined the impact of the five variable factors on the firms' financial health. The findings provided insights into the relationship between these financial ratios and the companies' bankruptcy risk, offering valuable information for investors, policymakers, and other stakeholders in the Indian financial market. The study demonstrated the applicability of the Altman Z-score model in predicting bankruptcy risk for NSE-listed companies in India and highlighted the importance of each variable factor in assessing a firm's financial condition. These findings can help stakeholders make informed decisions regarding investment, risk management, and policy formulation in the Indian financial market. |
| Databáze: | Directory of Open Access Journals |
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