EVALUATING FINANCIAL HEALTH OF SELECTED INDIAN COMPANIES THROUGH Z SCORE MODEL

Debanga Mukherjee

Abstract


Investors invest in a company after evaluating its financial performance. If the performance is volatile then it may affect adversely on the decision regarding investment of the investors. So this evaluation should be done very carefully and rationally. Investors go for financial analysis to judge financial performance. This analysis can be done by using various tools, such as-ratio analysis, decision theory etc. The result of analysis shows the present performances, but it cannot exhibit whether the company will have any chances of bankruptcy in near future or not. Z score is a financial tool which is used for bankruptcy prediction. It analyses financial data and the result of analysis categories a company in a zone according to its performance out of three zones; the zones are- bankruptcy, grey and safe / healthy. The aim of this paper is to judge the financial performance of selected Indian companies with the help of some selected ratios and to see whether the companies have probability of bankruptcy in near future or not.


Keywords


Z Score; Bankruptcy; Financial Health; Distress Analysis; Indian Companies

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References


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Book

Ghosh. Jayanta, Financial Statement Analysis, Kolkata, Tee Dee Publications (P) Ltd., Fifth Edition.


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