Discriminatory Power of the Altman Z-Score Model

• Authors: Kateřina Mičudová
• Languages of publication: EN

Abstracts

EN

This article aims to assess the discriminatory power of one of the most famous and most discussed corporate predictive models, the Altman ZScore. This model ranks among the bankruptcy models, whose main purpose is to detect the impending bankruptcy in good time. The research focuses on three main areas of assessing the discriminatory power of the model. The first part deals with the overall discriminatory power of the model; the second part is aimed at quantifying the impact of individual variables on misclassification of enterprises in bankruptcy. The last part quantifies the discriminatory power of individual variables of the model. The results are compared with the findings of the author of the model. The empirical research is based on the accounting data of Czech companies from the manufacturing industry. Both thriving and bankrupt companies are included in the research.

Keywords

EN

Altman; bankruptcy; financial health; predictive model; Z-Score

Discipline

• ECONOMICS: ECONOMICS

• Publisher: The Institute of Technology and Business in České Budějovice, Czech Republic
• Journal: Littera Scripta
• Year: 2013
• Volume: 1
• Pages: 95-106

Dates

published

2013-06-28

Contributors

author

Kateřina Mičudová

• University of West Bohemia