The Z-Score Model for Predicting Periods of Financial Instability. Z-Score Estimation for the Banks Listed on Bucharest Stock Exchange

Irina – Raluca Badea and Gheorghe Matei
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Irina – Raluca Badea: University of Craiova Faculty of Economics and Business Administration
Gheorghe Matei: University of Craiova Faculty of Economics and Business Administration

Finante - provocarile viitorului (Finance - Challenges of the Future), 2016, vol. 1, issue 18, 24-35

Abstract: Financial stability is an ongoing concern for practitioners, policy makers, but also for banks, especially in terms of quantifying it. Therefore, this paper consists of a theoretical approach in conjunction with an applicative study based on an alternative measure of financial stability, namely the Z-score model proposed by Altman. The Z-score model, although originally designed for manufacturing companies, has been repeatedly adjusted, depending on the activity of the company which applies the model and the development of the operating market. Thus, from a sample of banks listed on the Bucharest Stock Exchange, we determined the Z-score function for the period 2012-2014, outlining the evolution of their financial stability according to the classification results.

Keywords: financial stability; bankruptcy risk; Z-score model; ROA; Bucharest Stock Exchange (search for similar items in EconPapers)
JEL-codes: D81 E58 G21 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aio:fpvfcf:v:1:y:2016:i:18:p:24-35

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