PREDICTING BANKRUPTCY OF SELECTED MANUFACTURING COMPANIES LISTED IN COLOMBO STOCK EXCHANGE: APPLYING ALTMAN’S Z-SCORE

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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Analysis of bankruptcy issues at manufacturing companies, sub-sectors of cosmetics and houseappliances registered in Indonesia Stock Exchange (IDX) year 2015-2017 using Altman Z-score

The Accounting Journal of Binaniaga ◽

10.33062/ajb.v4i01.357 ◽

2019 ◽

Vol 4 (01) ◽

pp. 27

Author(s):

Indar Khaerunnisa ◽

Nur Anisa Rahayu

Keyword(s):

Financial Performance ◽

Financial Distress ◽

Stock Exchange ◽

Manufacturing Companies ◽

Z Score ◽

Marketing Performance ◽

Grey Area ◽

Manufacturing Company ◽

Score Model

This research aims to figure out the level of companies bankruptcy by applying Altman Z-Score at the manufacturing companies registered in the Indonesia Stocks Exchange. The result of the research has indicated that ZScore model is applicable to detect the company’s potential bankruptcy issues, especially manufacturing company subsectors of cosmetics and houseappliances. Altman Z-Score model has classified the companies into three categories; safe, grey area and distress. Based on the result of the research, for the companies which are in the grey area category are suggested to improve their financial performance and to use the benefit of all the assets properly to get the revenue as much as possible. However, for the companies which are in the safe category are suggested to increase their performance, especially marketing performance so that they will receive bigger amount of the revenue, nevertheless, the potential of financial distress can be minimized accordingly. Keywords: manufacturing company, financial distress, Altman Z-Score.

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Pengaruh Prediksi Kebangkrutan Model Altman Z-Score, Reputasi Auditor dan Opinion Shopping terhadap Opini Audit Going Concern

Owner ◽

10.33395/owner.v4i1.174 ◽

2020 ◽

Vol 4 (1) ◽

pp. 343-355

Author(s):

Muhammad Yunus ◽

Calen Calen ◽

Sarida Sirait

Keyword(s):

Stock Exchange ◽

Sampling Technique ◽

Bankruptcy Prediction ◽

Manufacturing Companies ◽

Z Score ◽

Audit Opinion ◽

Going Concern ◽

Opinion Shopping ◽

Score Model ◽

Auditor Reputation

This study aims to determine the effect of the bankruptcy prediction of the Altman z-score model, auditor reputation and opinion shopping on going concern audit opinion in manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019. This research is a causal associative research with a quantitative approach. The sample in this study were 25 manufacturing companies listed on the Indonesia Stock Exchange which were determined using purposive sampling technique. Observations in this study were carried out throughout the period 2015 to 2019 so that the number of observations was 125 data. The type of data used in this study is secondary data. While the data analysis method used in this research is panel data regression analysis with statistical data processing software, namely STATA. Based on the results obtained in this study, it can be seen that the prediction of bankruptcy based on the Altman z-score model has no significant effect on going concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange. Auditor reputation is proven to have a negative and significant effect on going concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange. And opinion shopping is also proven to have a negative and significant effect on going concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange.

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Bankruptcy Risk Prediction in Ensuring the Sustainable Operation of Agriculture Companies

Sustainability ◽

10.3390/su13147712 ◽

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.

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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

Зборник радова Економског факултета у Источном Сарајеву ◽

10.7251/zrefis2122011r ◽

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.

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ANALISIS TINGKAT AKURASI MODEL ALTMAN Z-SCORE, INDEKS KEPAILITAN, DAN INDEKS IN05 SEBAGAI PREDIKTOR KEBANGKRUTAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2011-2015

Jurnal Ecogen ◽

10.24036/jmpe.v1i1.4739 ◽

2018 ◽

Vol 1 (4) ◽

pp. 197

Author(s):

Diana Novita

Keyword(s):

Sampling Method ◽

Stock Exchange ◽

Secondary Data ◽

Total Sample ◽

Bankruptcy Prediction ◽

Manufacturing Companies ◽

Z Score ◽

Sample Test ◽

Score Model ◽

Post Hoc

This study discusses the use of bankruptcy prediction model that does not exist applied in Indonesia and determine the accuracy of each model. The research objective is to analyze the differences in outcome prediction and know the model that has the best accuracy level between the model Altman Z-Score, Bankruptcy Index, and IN05 Index. This type of research is a comparative study, the population of all manufacturing companies listed on the Indonesia Stock Exchange in 2011 to 2015. The sample is determined by purposive sampling method so acquired 28 companies, and the total sample is 140 years old company. Data used is secondary data obtained from the official website of Indonesia Stock Exchange (www.idx.co.id). The analytical method used is the analysis of different test-independent k-sample test, descriptive statistics and the accuracy of the model using post hoc test and the type of error. The results show that: 1) there are significant differences between the model of the Altman Z-Score model Insolvency Index, and models IN05 index on manufacturing companies listed on the Stock Exchange. 2) The model has the best accuracy by post hoc test is a model of the Altman Z-Score and by type of error is the most accurate models are models IN05 index.Keywords: Altman Z-Score, Insolvency Index, IN05, Bankruptcy

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Could the Altman Z-score model detect the financial distress in Ghana? Multivariate discriminant analysis

Corporate Governance and Sustainability Review ◽

10.22495/cgsrv4i2p1 ◽

2020 ◽

Vol 4 (2) ◽

pp. 8-19 ◽

Cited By ~ 1

Author(s):

John MacCarthy ◽

Richard Amoasi-Andoh

Keyword(s):

Discriminant Analysis ◽

Stock Exchange ◽

Manufacturing Firms ◽

Z Score ◽

Multivariate Discriminant Analysis ◽

Distressed Firms ◽

Financially Distressed ◽

Score Model ◽

Ghana Stock Exchange ◽

Multivariate Discriminant

The purpose of this paper is to assess the effectiveness of the Altman Z-score model to discriminate between financially distressed and non financially distressed manufacturing firms listed on the Ghana Stock Exchange. Eleven firms consisting of two financially distressed and nine non-financially distressed manufacturing firms were analysed. Independent descriptive statistics, independent sample t-test, and multivariate discriminant analysis were the analytical tools used to analyse the hypotheses of this study. The study revealed that working capital/total assets and sales/total assets were the major discriminators of financially distressed firms on the Ghana Stock Exchange. Multivariate discriminant analysis revealed an accuracy rate of 79.9% to detect financially distressed firms in Ghana.

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Analisis Altman Z-Core pada Perusahaan Manufaktur Sub Sektor Otomotif yang Terdaftar di Bursa Efek Indonesia

GEMA : Jurnal Gentiaras Manajemen dan Akuntansi ◽

10.47768/gema.v13i2.240 ◽

2012 ◽

Vol 13 (2) ◽

pp. 135-148

Author(s):

Andreas Suhendi ◽

Keyword(s):

Financial Distress ◽

Research Method ◽

Stock Exchange ◽

Ratio Method ◽

Manufacturing Companies ◽

Z Score ◽

Financial Ratio ◽

Analysis Techniques ◽

Score Model ◽

Descriptive Method

This research aims to know the financial performance of companies with the Altman Z-Score Model in the Automotive Sub-Sector Manufacturing Companies Listed on the Indonesia Stock Exchange in 2016-2018. The research method used in this study is a descriptive method with data analysis techniques using the financial ratio method. The results showed that PT. Astra International Tbk, PT. Astra Otoparts Tbk, PT. Gajah Tunggal Tbk and PT. Indospring Tbk is safe from the threat of bankruptcy, while the highest average Z-Score is achieved by PT Selamat Sempurna Tbk and the lowest average Z-Score is achieved by PT Indomobil Sukses International Tbk. Thus, the Company is expected to maintain company liquidity, restructure debt, minimize receivables, increase profit levels and maximize marketing in order to increase sales so that the potential for financial distress in the company can be minimized.

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Analysis of bankruptcy issues at manufacturing companies, sub-sectors of cosmetics and houseappliances registered in Indonesia Stock Exchange (IDX) year 2015-2017 using Altman Z-score

The Accounting Journal of Binaniaga ◽

10.33062/ajb.v4i01.311 ◽

2019 ◽

Vol 4 (01) ◽

pp. 27

Author(s):

Indar Khaerunnisa ◽

Nur Anisa Rahayu

Keyword(s):

Financial Performance ◽

Financial Distress ◽

Stock Exchange ◽

Manufacturing Companies ◽

Z Score ◽

Marketing Performance ◽

Grey Area ◽

Manufacturing Company ◽

Score Model

This research aims to figure out the level of companies bankruptcy by applying Altman Z-Score at the manufacturing companies registered in the Indonesia Stocks Exchange. The result of the research has indicated that ZScore model is applicable to detect the company’s potential bankruptcy issues, especially manufacturing company subsectors of cosmetics and houseappliances. Altman Z-Score model has classified the companies into three categories; safe, grey area and distress. Based on the result of the research, for the companies which are in the grey area category are suggested to improve their financial performance and to use the benefit of all the assets properly to get the revenue as much as possible. However, for the companies which are in the safe category are suggested to increase their performance, especially marketing performance so that they will receive bigger amount of the revenue, nevertheless, the potential of financial distress can be minimized accordingly. Keywords: manufacturing company, financial distress, Altman Z-Score.

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MODEL ALTMAN Z-SCORE UNTUK MEMPREDIKSI FINANCIAL DISTRESS : STUDI EMPIRIS PADA INDUSTRI MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

JURNAL PUNDI ◽

10.31575/jp.v1i2.14 ◽

2017 ◽

Vol 1 (2) ◽

Author(s):

Lidya Martha ◽

Sri Mardhatillah ◽

Zusmawati Zus

Keyword(s):

Financial Distress ◽

Sampling Method ◽

Stock Exchange ◽

Manufacturing Companies ◽

Z Score ◽

Purposive Sampling ◽

Financial Difficulties ◽

Grey Area ◽

Score Model ◽

A Company

Financial distress is the financial difficulties experience by a company before the company become bankruptcy (Mafiroh, 2016). The purpose of this study was to determine which firms would be predicted financial distress. The population in this research is manufacturing companies listed in Indonesia Stock Exchange in 2015. In this study, the population is used 365 companies. The process of collecting samples are using purposive sampling method. The model used to analyze the rate of financial distress is Altman Z-Score Model. The results showed that of the 15 companies that were sampled 5 (five) of them were healthy (>2,99), 2 (two) of them were financial distress (<1,81) and 8 (eight) indicated in grey area (1,81 – 2,99).

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