“Forecasting financial distress using Altman Z score and Evaluation of Financial Performance using financial Parameters (Pre and Post Promoter’s Equity Shareholding Pledge) with special reference to the case of Coffee Day Enterprises Limited. (CDEL)”

  • Prof. S. Rameshkumar Mehtha, Dr.Meghana Bhilare, Dr.Vijayshri Mehtha


Financial distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations. Promoters’ Equity Shareholding pledging is quiet common nowadays. The main aim of the research undertaken is to find out whether company is in Financial Distress using TEN years data for the company Coffee Day Enterprises Ltd.  Data collected on various financial parameters from the financial year 2010 to Financial year 2019. The Research paper is an endeavor to assess the financial distress using distress using Altman Z score (Pre and Post Promoter’s Equity Shareholding Pledge). The Research paper is an endeavor to Evaluate the Financial Performance using financial Parameters Pre and Post Promoter’s Equity Shareholding Pledge) The method used is a case study method with specific company only. The current study used financial performance indicators viz., Asset Turnover Ratio, Long-term debt equity ratio, Fixed Asset Turnover Ratio, Total debt to owner’s fund, Total Asset Turnover Ratio, Debt Equity Ratio, Debtors Turnover Ratio, Dividend Payout Ratio, Inventory Turnover Ratio, Dividend Per Share, Gross Profit Margin, Earnings Retention Ratio, Net Profit Margin, Earnings yield, EBIT Margin, Enterprise Value, Cash Profit Margin, Market Capitalization, Operating Profit Margin, Market Price, Return on long term funds, Retained earnings/Total Assets, Return on capital employed, Market value of equity/ Total Liabilities, Return on net worth, Working capital/Total Assets, Current Ratio, Sales/Total Assets, Quick Ratio, Earnings before interest and taxes/Total Assets, Net Sales, Total Assets, Retained Earnings, Working Capital etc.  The Altman Z score is used for analyzing the data and interpret the financial distress of the company. Statistical Tools used for Data analysis Descriptive Statistics, Independent Sample T Test, Correlation

Financial statement analysis and various financial ratios are used for analysis. The research is based on secondary data and data is mainly collected from Bombay Stock Exchange website and annual reports published.

The purpose for considering Coffee Day Enterprises Limited for this research is due to its lot much news related to its high debt. The findings suggest that the financial distress can be predicted from financial performance as well leads to pledging of shares by promoter.


Key Words:  Altman Z Score, Financial Performance, Promoters Equity Share pledging, Financial Ratios, Independent Sample T Test, Pre and post Promoters Equity Share pledging Financial Performance