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ASSESSING FINANCIAL HEALTH OF A FIRM USING ALTMAN’S ORIGINAL AND REVISED Z-SCORE MODELS: A CASE OF KINGFISHER AIRLINES LTD (INDIA)

Manoj Kumar and Madhu Anand
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Madhu Anand: Indus Business Academy, Greater Noida, India

Journal of Applied Management and Investments, 2013, vol. 2, issue 1, 36-48

Abstract: In this case study, we used both Altman's Z-score and Modified Z”-score models to investigate whether it is possible to rely on Altman’s Models (1968, 1983) to assess financial health and predict financial failure of a publicly traded non-manufacturing company in India. The findings of this case study indicated that the Altman's original Z-score model predicted that the financial health of the firm under consideration is not consistent over a period of 2005 - 2012. The same is confirmed by the Revised Z”-score model as well. According to this study, the models were able to predict financial distress and probable future bankruptcy of the firm. The mean Z-score for the firm under investigation during the period 2005-2012 is 0.918 and the mean Z”-score for the same period is 0.019, both being less than cut-offs confirm poor financial health of the firm and that the bankruptcy is very likely to happen.

Keywords: Altman’s original and modified Z-score model; bankruptcy assessment; financial and operational health; Kingfisher Airlines (search for similar items in EconPapers)
Date: 2013
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