scholarly journals Insolvency Risk. Application of Altman Z-score to the auto parts sector in Romania

2021 ◽  
Vol 7 (4) ◽  
pp. 37-48
Author(s):  
Rodica Baciu ◽  
Brezeanu Petre ◽  
Adrian Simon
Keyword(s):  
Interest Rates ◽  
Motor Vehicle ◽  
Stress Test ◽  
Future Research ◽  
Z Score ◽  
Working Capital ◽  
Insolvency Risk ◽  
Medium Risk ◽  
Capitalization Rate ◽  
Score Model

This paper intends to apply the Altman Z-score model to all the companies active in the wholesale of motor vehicle parts and accessories (NACE 4531), with extended financial statements. Using the panel data model over the time series for 2008-2016 on the companies of this sector, we conclude that 99% of the Z-score is explained by the independent variables (working capital, capital structure, turnover, earnings before interest and tax), with estimated parameters very close to the models classical values. The sample description of the paper and the corresponding results highlights the Z-score evolution by turnover clusters and principal components, with the largest companies performing the best (the only cluster with Z-score median above 3). We notice a tendency for decreasing high risk companies and increase in the medium risk companies, whereas the low risk companies are relatively stable. This improvement is mostly due to increasing capitalization rate and less external debt, despite the deteriorating working capital and operating margin. We believe that future research to evaluate Z-score sensitivity under stress test scenarios would be very useful to provide an insight of companies’ insolvency risk amid increasing interest rates and different fiscal tax on dividend.

scholarly journals Insolvency Risk. Application of Altman Z-Score to the Auto Parts Sector in Romania

2020 ◽  
Vol 6 (1) ◽  
pp. 7-18
Author(s):  
Rodica Baciu ◽  
Brezeanu Petre ◽  
Adrian Simon
Keyword(s):  
Interest Rates ◽  
Motor Vehicle ◽  
Stress Test ◽  
Future Research ◽  
Z Score ◽  
Working Capital ◽  
Insolvency Risk ◽  
Medium Risk ◽  
Capitalization Rate ◽  
Score Model

This paper intends to apply the Altman Z-score model to all the companies active in the wholesale of motor vehicle parts and accessories (NACE 4531), with extended financial statements. Using the panel data model over the time series for 2008-2016 on the companies of this sector, we conclude that 99% of the Z-score is explained by the independent variables (working capital, capital structure, turnover, earnings before interest and tax), with estimated parameters very close to the model`s classical values. The sample description of the paper and the corresponding results highlight the Z-score evolution by turnover clusters and principal components, with the largest companies performing the best (the only cluster with Z-score median above 3). We notice a tendency for decreasing high-risk companies and increase in the medium risk companies, whereas the low-risk companies are relatively stable. This improvement is mostly due to the increasing capitalization rate and less external debt, despite the deteriorating working capital and operating margin. We believe that future research to evaluate Z-score sensitivity under stress test scenarios would be very useful to provide an insight into companies’ insolvency risk amid increasing interest rates and different fiscal tax on dividends.

scholarly journals Analisis Financial Distress Menggunakan Metode Altman Z–Score pada PT. Golden Plantation Tbk. Periode 2014-2018

2021 ◽  
Vol 2 (1) ◽  
pp. 102-121
Author(s):  
Cintya Meiske Idi ◽  
Johanis Darwin Borolla
Keyword(s):  
Financial Distress ◽  
Quantitative Data ◽  
Financial Statements ◽  
Future Research ◽  
Z Score ◽  
Analysis Method ◽  
Working Capital ◽  
Dangerous Zone ◽  
Score Method ◽  
Selection Of

The goal of this study is to decide how the effects of the analysis of predictions of financial distress using the Atlman Z-score method with estimates for the period 2014-2018 on PT Golden Plantation Tbk are determined. PT Golden Plantation, which is a business engaged in the oil palm plantation industry with the type of data used, is the focus of this study, namely quantitative data in the form of the financial statements of PT Golden Plantation for the period 2014 to 2018. And the Altman Z - Score Adjusted variable aproach is the data analysis method used in this study. It can be inferred that, based on the findings of the report, the organization started to encounter financial distress in 2014. In 2015 to 2018 the altman z - score of PT Golden Plantation was <1.1 or a dangerous zone which means that PT Golden Plantation Tbk is in a bankrupt condition. And we can be sure that the company will also face financial problems in the next few years. This is attributable to the selection of debt used by the firm. The utilization of the company's existing debt tends to rise each year, exceeding the value of the company's current assets, so that the working capital of the company still has a negative variable. To Future research is suggested to add other variables in examining financial distress.

scholarly journals Implementasi Model Finansial Distres Pada Perusahaan Manufaktur Yang Terdaftar di IDX Tahun 2015-2017

2020 ◽  
Vol 9 (1) ◽  
pp. 61-74
Author(s):  
Tuti Zakiyah ◽  
Wahyuni Windasari
Keyword(s):  
Logistic Regression ◽  
Financial Distress ◽  
Binary Logistic Regression ◽  
Z Score ◽  
Working Capital ◽  
Binary Variable ◽  
The Third ◽  
A Value ◽  
Univariate Model ◽  
Score Model

Manufacturing Company is a sample of this study, the dependent variable used in this study is a binary variable, namely whether the company is in financial distress or non-financial distress. Hypothesis testing uses binary logistic regression (Binary Logistic Regression) because the dependent variable is a combination of metric and non-metric (nominal). The model used is the Altman Z-Score model, Springate S-Score, Grover G-Score, Zmijewski X-Score, and univariate models. Of the five models, the best model is the Springate S-Score with a Nagelkerke R2 value of 0.582. the second is, Zmijewski X-Score with a value of 0.227 and the third best is the Univariate Model with a value of 0.042. Of the three best models, namely the Springate S-Score, Zmijewski X-Score and the Univariate Model. The implementation is that the ratios in these models are very important to be considered by companies as a sensitivity tool so that companies do not experience financial distress. ratios that are often used are ratios related to the company's ability to manage and produce net working capital, sales, debt and ability to generate profits from sales and profits from assets.

scholarly journals Bankruptcy Risk Prediction in Ensuring the Sustainable Operation of Agriculture Companies

2021 ◽  
Vol 13 (14) ◽  
pp. 7712
Author(s):  
Bosiljka Srebro ◽  
Bojan Mavrenski ◽  
Vesna Bogojević Arsić ◽  
Snežana Knežević ◽  
Marko Milašinović ◽  
...  
Keyword(s):  
Emerging Markets ◽  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
Annual Reports ◽  
Future Research ◽  
Manufacturing Companies ◽  
Z Score ◽  
Bankruptcy Probability ◽  
Score Model

In recent decades, predicting company bankruptcies and financial troubles has become a major concern for various stakeholders. Furthermore, because financially sustainable businesses are affected by numerous highly complex factors, both internal and external, the situation is even more complex. This paper applies Altman’s Z-score models; more precisely, the paper applies the initial Z-score model (a model for manufacturing companies), the Z′-score model (for companies operating in emerging markets), and the Z-score bankruptcy probability calculation. Therefore, this paper offers the results of the application of different Z-score models and the calculation of bankruptcy probability on a sample of agricultural companies listed on the Belgrade Stock Exchange in the period 2015–2019. In addition, different Z-score models are used for the same sample so that the difference between their results and application can be determined. In addition, the validity of the data published in the financial statements of the respective companies was confirmed using the Beneish M-score model with five and eight variables. The results obtained by applying Altman’s Z-score model (initial and adapted to emerging markets) indicate that a certain number of companies had impaired financial stability during the observed period, i.e., that they were in danger of bankruptcy. In addition, based on the results obtained using the Beneish M-score model, it was identified that a number of companies showed signals that indicate possible fraudulent financial reporting. Further, it was found that less than half of the observed companies reported on environmental protection in their annual reports, and they did so by providing a modest amount of information. The originality and value of the paper lies in suggesting that policymakers in the Serbian emerging markets should pay more attention to the operations of companies from the observed sector, as well as to their financial and non-financial reporting. Future research should focus on comparisons with agricultural companies from the same sector whose securities are listed on stock exchanges in the region.

scholarly journals COMPARISON OF ALTMAN'S Z - SCORE MODEL AND ALTMAN'S Z''- SCORE MODEL ON THE SAMPLE OF COMPANIES WHOSE SHARES ARE INCLUDED IN THE REPUBLIC OF SRPSKA STOCK EXCHANGE INDEX

2021 ◽  
Vol 21 (1) ◽  
Author(s):  
Goran Radivojac ◽  
Aleksandra Krčmar ◽  
Boško Mekinjić
Keyword(s):  
Financial Distress ◽  
Stock Exchange ◽  
Emerging Market ◽  
Manufacturing Companies ◽  
Financial Health ◽  
Z Score ◽  
Insolvency Risk ◽  
Privately Held Firms ◽  
The Republic ◽  
Score Model

In this paper, we analysed companies whose shares are included in the Republic of Srpska Stock Exchange Index (BIRS), using Altman's Z-Score model and Altman's Z"-Score model, in order to determine their insolvency risk. Altman's Z-Score is a combination of five weighted financial ratios used to estimate the likelihood of financial distress, and possible bankruptcy of the observed companies. It is used widely by auditors, accountants, commercial banks, and other organizations to assess the financial health of their clients. Altman also developed revised versions of the model to assess the financial health of privately-held firms and non-manufacturing companies, as well as companies in emerging markets - Altman's Z'- Score model and Altman's Z" - Score model. The results of our research on a sample of 14 companies whose shares are included in BIRS show that, although it is an emerging market, Altman's Z-Score model gives better results that indicate much-needed caution when drawing conclusions about the observed companies.

scholarly journals Pengaruh Working Capital, Sales, Operating Profit dan Cash Profit Terhadap Default Sukuk di Indonesia

2017 ◽  
Vol 4 (3) ◽  
pp. 173
Author(s):  
Atik Fazalina ◽  
Raditya Sukmana
Keyword(s):  
Logistic Regression ◽  
Z Score ◽  
Working Capital ◽  
Operating Profit ◽  
Dichotomous Variable ◽  
Score Model ◽  
Model Affect

This research aims to determine how four ratios from new altman z-score model affect sukuk default in Indonesia. The case of sukuk default in Indonesia occur by PT Berlian Laju Tanker. These ratios are working capital to total assets, sales to total assets, operating profit to total assets and the cash profit to total assets. Approach used is the logistic regression, as the dependent variable in this research is a dichotomous variable with two categories in the form of default and non-default. The sample used in the period 2007: Q1 to 2015: Q3. The results of this research obtained that the influence of four variables used are the working capital to total assets, sales to total assets, operating profit to total assets and the cash profit to total assets was significant toward sukuk default of Berlian Laju Tanker.

ANALISA KESEHATAN KEUANGAN PERUSAHAAN UNTUK MEMPREDIKSI KEBANGKRUTAN PERUSAHAAN DENGAN MENGGUNAKAN METODE ALTMAN (STUDI KASUS PADA PERUSAHAAN MANUFAKTUR SEKTOR KOMPONEN OTOMOTIF YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2011 – 2015)

2019 ◽  
Vol 13 (2) ◽  
pp. 55
Author(s):  
Indar Khaerunnisa ◽  
Edy Cahyadi
Keyword(s):  
Motor Vehicle ◽  
Stock Exchange ◽  
Secondary Data ◽  
Z Score ◽  
Financial Ratio ◽  
Average Value ◽  
Automotive Components ◽  
Grey Area ◽  
Financial Ratio Analysis ◽  
Year 2013

The Indonesian government has set the motor vehicle industry as one of the priority industries of the national interest, economic growth, and increased productivity. In order for the survival of a company is maintained, then the management should be able to maintain or even more spur increased performance. Various analyzes were developed to predict the beginning of the bankruptcy of the company. One analysis is widely used today is the analysis of Altman Z-Score, which this analysis refers to the financial ratios of the company. The purpose of this study was to analyze the bankruptcy of the automotive components companies that go public in Indonesia Stock Exchange year period 2011–2015. This study used a sample of four companies from the automotive components sector. Source of data is done by using secondary data. The data is processed by the method of the Z-score formula Z = 1,2X1 + 1,4X2 + 3,3X3 + 0,6X4 + 0,999X5. With the description of Z < 1,8 the company categorized into unhealthy/will be bankrupt, the value Z 1,8 < 2,99 the company is considered to be in the uncertain/grey area and the value of Z > 2,99 then the company is in a very healthy. In general, the results of these studies indicate that the four automtive components companies namely PT Astra Otoparts year 2011 value of Z = 14,67 year 2012 value of Z = 10,88 year 2013 value of Z = 13,90 year 2014 value of Z = 10,54 year 2015 value of Z = 4,94, PT Gajah Tunggal year 2011 value of Z = 5,72 year 2012 value of Z = 4,75 year 2013 value of Z = 3,10 year 2014 value of Z = 2,79 year 2015 value of Z = 1,58 and the average value of 2011-2015 periode Z = 3,59, PT Goodyear Indonesia year 2011 value of Z = 2,07 year 2012 value of Z = 2,44 year 2013 value of Z = 2,57 year 2014 value of Z = 2,02 year 2015 value of Z = 2,76, PT Indomobil Sukses Internasional year 2011 value of Z = 6,19 year 2012 value of Z = 3,99 year 2013 value of Z = 3,17 year 2014 value of Z = 2,59 year 2015 value of Z = 1,74. The average value 2011-2015 period showed 3 companies are in very healthy state and 1 company is in the uncertain/grey area. Keywords: Financial Ratio Analysis, Analysis of bankruptcy, Altman Z-Score Analysis, Automotive Components Company, Go Public.

Lack of Credit in Albania; Who is to “Blame” Analyzing the Demand

2015 ◽  
Vol 3 (1) ◽  
pp. 122
Author(s):  
Eugen Musta ◽  
Elvin Meka
Keyword(s):  
Interest Rates ◽  
Small Sample ◽  
Economic Situation ◽  
Demand Side ◽  
Working Capital ◽  
Global Crisis ◽  
High Interest ◽  
Future Perceptions ◽  
Economic Slowdown ◽  
To Come

The last global crisis had it influence on Albanian economy as well. As the economy is still struggling to recover from the slowdown, a special attention is dedicated to lending which will in turn help investments pick up. Banks in Albania are currently flooding in excess deposits, but meanwhile the lending has hit its lowest score. What is refraining banks from lending? Is it really them to blame or maybe the demand is also part of the problem? Are businesses suffering from lack of funds to finance their activity or are they hesitating to invest and are waiting for better times to come along? The purpose of this study is to look into these questions and find the reasons behind them. This paper is focused on the demand side, analyzing some of the most important indicators influencing the demand for credit like enterprises growth, profits, planned investments, working capital needs, liquidity, etc. In order to get better understanding on the behavior of these variables the enterprises are divided in four groups by size criteria. The analysis is covering data for five-year timeframe, which is corresponding with the start of the economic slowdown. To help getting a prospect of the present and the future perceptions of the economic situation, a survey was conducted on a small sample of enterprises. This study comes to the conclusion that the demand for credit is growing, but what’s keeping businesses from applying for it, is mainly because of high interest rates and cost of credit, the study ends with some recommendations toward the solution.

Rasio-Rasio Keuangan dalam Memprediksi Kecurangan

2018 ◽  
Vol 10 (1) ◽  
pp. 66-76
Author(s):  
Alfian Ronggo Pribadi
Keyword(s):  
T Test ◽  
Total Asset ◽  
Z Score ◽  
Working Capital ◽  
Net Profit ◽  
Current Asset ◽  
Equity Ratio

Penlitian ini bertujuan untuk membuktikan apakah perusahaan yang melakukan kecurangan akuntansi dengan yang tidak melakukan kecurangan akuntansi memiliki nilai rasio yang berbeda secara signifikan dengan menggunakan dua model pendeteksi kecurangan akuntansi  yaitu Beneish M-Score da Altman Z-Score. Penelitian ini menggunakan delapan variabel yaitu debt to equity ratio , debt to total asset ratio, net profit to revenue ratio, current asset to total asset ratio, receivable to revenue ratio, inventory to total asset ratio,working capital to total asset ratio dan revenue to total asset ratio. Populasi dari penelitian ini adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia periode 2010-2016. Total sampel dalam penelitian ini sebanyak 57 perusahaan  dengan jumlah observasi sebanyak 212. Pengujian hipotesis dengan menggunakan uji beda independent sample t-test. Hasil penelitian ini menunjukkan bahwa variabel  debt to equity ratio , debt to total asset ratio, net profit to revenue ratio, working capital to total asset ratio dan revenue to total asset ratio memiliki perbedaan yang signifikan antara perusahaan yang melakukan kecurangan akuntansi dengan yang tidak melakukan kecurangan akuntansi. Sedangkan untuk variabel current asset to total asset ratio, receivable to revenue ratio , dan inventory to total asset ratio tidak memiliki perbedaan yang signifikan antara perusahaan yang melakukan kecurangan akuntansi dengan yang tidak melakukan kecurangan akuntansi.  

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