Title: Predicting Bankruptcy: The Altman Z-Score Model, a Multi-Purpose Tool That Requires Cautious Use
Abstract: Although businesses may have varying purposes, the main objective is the same for all of them and it is simply avoiding bankruptcy. Since a company’s bankruptcy is critical for not only its stakeholders but also for the oth- er parties such as its suppliers and creditors, the ability to diagnose the problems of a company in advance is a very valuable asset. The models that provide the ability to predict bankruptcy are important from the national economy perspective as well, since the employment of them is a precondition for guaranteeing the soundness and stability of the banking system and paving the way for incentive compatible, risk sensitive behaviour of debtors.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
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