Volume : 6, Issue : 4, April - 2017

A Descriptive Study of Altman�s Z Score Model in Bankruptcy Prediction

Syed Jaffer, Dr Badiuddin Ahmed

Abstract :

<p>&nbsp;<span style="font-size:12.0pt;line-height:115%;&#10;font-family:&quot;Times New Roman&quot;,serif;mso-fareast-font-family:Calii;mso-fareast-theme-font:&#10;minor-latin;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:&#10;AR-SA">Many Business undertaking works for the purpose of profit objective. Their financial soundness is of most importance to its stakeholders. What will be the &nbsp;future of the business ,whether it will flourish or will become bankrupt, has caught the attention of the various researchers around the globe and has led to the development of many theories. To be able&nbsp; to&nbsp; predict&nbsp; the&nbsp; financial&nbsp; soundness&nbsp; of&nbsp; a&nbsp; business&nbsp; has&nbsp; led&nbsp; to&nbsp; many&nbsp; research&nbsp; works. Financial ratios are a key indicator of financial soundness of a business. Financial ratios are the tools to determine the operational &amp; financial efficiency of business enterprises. There are &nbsp;a large number of ratios propounded by many authors.&nbsp; Altman developed a z-score model for predicting bankruptcy using&nbsp; ratios&nbsp; as&nbsp; the base. Using Z-&nbsp; Score model, Altman&nbsp; could&nbsp; predict&nbsp;</span></p>