The effectiveness of the Spanish banking reform application of Altman’s Z-Score

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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ANALISIS KINERJA KEUANGAN UNTUK MEMPREDIKSI FINANCIAL DISTRESS MENGGUNAKAN METODE Z-SCORE PADA PT INDOFARMA, TBK (studi pada BEI periode 2012-2016)

JIMEK : Jurnal Ilmiah Mahasiswa Ekonomi ◽

10.30737/jimek.v1i1.288 ◽

2019 ◽

Vol 1 (1) ◽

Author(s):

Danuk Windasari ◽

Budi Rahayu ◽

Marwita Andarini

Keyword(s):

Financial Performance ◽

Financial Distress ◽

Secondary Data ◽

Ratio Analysis ◽

Z Score ◽

Descriptive Data ◽

Financial Position ◽

Gray Area ◽

Score Method ◽

Quantitative Descriptive

Ratio analysis is one of the important tools to know the company's financial position. One of its uses is used to predict financial distress. The purpose of this study is to determine the company's financial performance in predicting financial distress at PT Indofarma Tbk through the Z-Score method for the period 2012-2016. The type of research used is quantitative descriptive. Data obtained from secondary data is through the site www.idx.co.id. The results showed that PT Indofarma Tbk in its financial performance in the years under study was less efficient or faced the threat of serious bankruptcy, whereas in the previous year the company was in a gray area or prone condition. Analisis rasio merupakan salah satu alat penting mengetahui posisi keuangan perusahaan. Salah satu kegunaanya digunakan untuk memprediksi financial distress. Tujuan penelitian ini untuk mengetahui kinerja keuangan perusahaan dalam memprediksi fianancial distress pada PT Indofarma Tbk meflalui metode Z-Score periode 2012-2016. Jenis penelitian yang digunakan deskriptif kuantitatif. Data yang diperoleh dari data sekunder yaitu melalui situs www.idx.co.id. Hasil penelitian menunjukkan bahwa PT Indofarma Tbk dalam kinerja keuangannya pada tahun-tahun yang diteliti kurang efisien atau menghadapi ancaman kebangkrutan serius, sedangkan ditahun sebelumnya perusahaan berada pada kondisi grey area atau rawan .

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The Application of Altman’s Z-Score Model in Predicting Bankruptcy: Evidence from the Trading Sector in Sri Lanka

International Journal of Business and Management ◽

10.5539/ijbm.v10n12p269 ◽

2015 ◽

Vol 10 (12) ◽

pp. 269 ◽

Cited By ~ 4

Author(s):

Aloy Niresh J. ◽

Pratheepan T.

Keyword(s):

Sri Lanka ◽

Early Warning ◽

Financial Distress ◽

Safe Zone ◽

Grey Zone ◽

Z Score ◽

Financial Reports ◽

Financial Position ◽

Score Model

Prediction of bankruptcy is crucial as the early warning may change entire complications and may avoid the high cost that is associated with distress. The main purpose of this study is to examine the likelihood of bankruptcy of the firms belonging to the Trading Sector in Sri Lanka. The research used data from the financial reports of seven trading companies for a period of the last five years from 2010 to 2014. Altman’s original (1968) bankruptcy model has been applied in order to classify the companies in various levels of financial position namely safe, grey and distress. Findings reveal that 71% of the companies belonging to the Trading Sector were in financial distress and the rest of whole 29% were in the grey zone. The fact that none of the companies lie under the safe zone highlights that as a whole the sector is in a menace.

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The Profitability of Public Enterprises in Pakistan

The Pakistan Development Review ◽

10.30541/v23i2-3pp.147-163 ◽

1984 ◽

Vol 23 (2-3) ◽

pp. 147-163 ◽

Cited By ~ 1

Author(s):

Khwaja Sarmad

Keyword(s):

Predictive Power ◽

Public Enterprise ◽

Ratio Analysis ◽

Public Enterprises ◽

Balance Sheets ◽

The Public ◽

Analysis Methodology ◽

Capital Financing ◽

Profitability Ratios

The importance of the profitability of public enterprise for capital expansion and development has been highlighted in various studies, e.g. in (2], [4] and (5). In Pakistan the increasing role of the public sector in resource mobilization points to the need for analysing public enterprise profitability because of its immense importance for capital financing and growth. This paper analyses the profitability of public enterprises in Pakistan using a Ratio analysis methodology which chooses performance indicators on the basis of their sensitivity to the operational health of the enterprises. The profitability ratios discussed here have been derived from the public-enterprise balance-sheets [9] and constitute the choice-set from which four ratios have been selected on the basis of their predictive power. (See [I], [3], [8] and [10].) In this way, the arbitrariness involved in the choice of the appropriate ratios for analysing enterprise profitability is overcome, even though profitability measurement may still be distorted to such an extent that effective prices diverge from opportunity costs. This makes the task of performance evaluation difficult as such an exercise has to take into account the implications of market distortions. The usefulness of profitability as an indicator of relative inter-firm performance is therefore limited by the fact that prices are administered with reference to products and are not tied to firm experience. But, owing to the lack of data on the required variables, the effect of market distortions on profitability is difficult to analyse.

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Predicting the Risk of Insolvency in Small Enterprises: Critical Analysis of the Predictive Model Associated with the New Italian Code of Business Crisis

International Journal of Business and Management ◽

10.5539/ijbm.v16n7p41 ◽

2021 ◽

Vol 16 (7) ◽

pp. 41

Author(s):

Anna Maria Arcari ◽

Daniele Grechi

Keyword(s):

Predictive Model ◽

Critical Analysis ◽

Control Sample ◽

Small Enterprises ◽

Z Score ◽

Balance Sheets ◽

New Business ◽

Score Model ◽

Business Crisis

Numerous studies have been conducted to verify whether, and under what conditions, Altman's Z-Score model can also be applied to unlisted, non-US companies. The response of numerous studies confirms the substantial validity of this algorithm. However, in Italy, the legislator, in launching the new Business Crisis Code in 2019, in adherence to an important European recommendation, did not adopt the aforementioned model but approved a different one. In order to find a justification for this choice, the present work intends to test the effectiveness of the warning indices that will be adopted in Italy by comparing them with the Altman predictive model in the Z'' Score version. To this end, the two models were applied to the balance sheets of 789 Italian firms that went bankrupt in the period 2016-2018 and, at the same time, to a control sample, equal in number and composition, of non-bankrupt firms. The results of this analysis produced two distinct findings. The Italian method proved to be less effective in predicting a crisis than the Z'' score. but more effective in determining whether a firm is truly healthy. This evidence is useful to confirm once again the effectiveness of the Z'' Score in a non-American context but also, and above all, to provide suggestions to the Italian legislator so that it can refine the predictive model currently in force.

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Analysis of the financial position of mill companies in Vojvodina

Journal on Processing and Energy in Agriculture ◽

10.5937/jpea24-30296 ◽

2020 ◽

Vol 24 (3-4) ◽

pp. 119-122

Author(s):

Dragana Tekić ◽

Beba Mutavdžić ◽

Nebojša Novković ◽

Tihomir Novaković ◽

Nataša Vukelić

Keyword(s):

Financial Stability ◽

Test Model ◽

Z Score ◽

Financial Reports ◽

Financial Ratio ◽

Quick Test ◽

Financial Position ◽

The Subject ◽

Score Model

The subject of this research is the financial position of mill companies in Vojvodina. The specific aim of the research is to analyze the is to compare the applied models for the analysis of the financial position. The basis of the analysis are the financial reports of the observed companies in the period from 2015 to 2019. The analysis of the financial position was performed using two models: Altman's Z-score model and Kralicek's Quick test model. These models use standard financial ratio indicators to assess the risk of bankruptcy of companies, i.e. their financial stability and profitability. The obtained results suggest that the company MLINTEST stood out as the most successful company and that the company KIKINDSKI MLIN stood out as the company with the worst financial position. Both models gave similar results, and their further use is recommended when analyzing the financial position of mill companies in Vojvodina financial position, i.e. to assess the risk of bankruptcy of medium-sized mill companies in Vojvodina. The general aim of the research.

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Financial Performance of Retail Industry Before and After E-Commerce Booming in Indonesia: A Study of Altman Z-Score Model

Proceedings of the 3rd International Conference on Banking, Accounting, Management and Economics (ICOBAME 2020) ◽

10.2991/aebmr.k.210311.014 ◽

2020 ◽

Author(s):

Siti Rochmah Ika ◽

Fami Nursiningsih ◽

Henry Sarnowo ◽

Sahadi

Keyword(s):

Financial Performance ◽

Retail Industry ◽

Z Score ◽

Before And After ◽

Score Model

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Financial Soundness of Housing Finance Companies: Application of Altman Z- Score Model

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.d1098.1284s319 ◽

2019 ◽

Vol 8 (4S3) ◽

pp. 395-397

Keyword(s):

Housing Finance ◽

Z Score ◽

Financial Position ◽

Financial Soundness ◽

Score Model

Housing financing industry is the essentially industry most of the housing financing companies contributing greatly to the development of our economy and have. Recently, some of the housing financing companies have started losing profits continuously and are on the verge of bankruptcy. The purpose of this paper is to study the financial position of housing companies by applying the famous Altman Z score model to verify whether these companies really suffered financially during the period from 2015 to 2019,16 housing companies are considered for the analysis of the study. It was found that not all the housing finance companies were performing as expected.

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EVALUATING FINANCIAL HEALTH OF GUJARAT STATE FERTILIZERS THROUGH ‘Z’ SCORE MODEL

International Journal of Research -GRANTHAALAYAH ◽

10.29121/granthaalayah.v6.i7.2018.1289 ◽

2018 ◽

Vol 6 (7) ◽

pp. 115-120

Author(s):

Vikash Saini

Keyword(s):

Financial Statements ◽

Business Failure ◽

Financial Health ◽

Z Score ◽

Gujarat State ◽

Financial Position ◽

Financial Soundness ◽

Score Model ◽

Altman Model

The evaluation of financial health is very useful for financial managers, investors and other users. In this study it is tried to know whether Z score model is able to evaluate financial health of Chambal Fertilizers and Chemicals ltd for past 10 years (2007-08 to 2016-17). Analysis of this paper shows that the model is useful to know the financial soundness of Chambal Fertilizers. In this paper overall results of Z score model indicating that the financial position of the corporation is on alert to exercise the caution. These result shows that Altman model can give good analysis for fertilizers sector in India. Hence it can be concluded that user of financial statements like financial managers, analysts, investors etc can predict business failure or financial soundness of companies through Altman Z score model.

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