A Study on Bankruptcy Using Altman Z-Score Prediction Model

Abstract

The main objective of this study is to foresee  the bankruptcy position of the company SME by using the model Altman Z-Score. The Altman Z-Score is an empirical model which  predicts the corporate insolvency; The  financial health of the organisation can be studied, by this tool particularly about the liquidity position of the companies.  The present research  paper focuses on four financial ratio’s indicators of Altman Z-score in order to predict or ascertain  the financial distress and the bankruptcy position of the company. The ratio’s indicators include Working capital to Total Assets, Retained Earnings to Total Assets, Earnings before income and tax to Total Assets and Book value of equity to Total Liabilities.