...PREDICTING FINANCIAL DISTRESS OF COMPANIES: REVISITING THE Z-SCORE AND ZETA® MODELS Edward I. Altman* July 2000 *Max L. Heine Professor of Finance, Stern School of Business, New York University. This paper is adapted and updated from E. Altman, “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy,” Journal of Finance, September 1968; and E. Altman, R. Haldeman and P. Narayanan, “Zeta Analysis: A New Model to Identify Bankruptcy Risk of Corporations,” Journal of Banking & Finance, 1, 1977. Predicting Financial Distress of Companies: Revisiting the Z-Score and ZETA® Models Background This paper discusses two of the venerable models for assessing the distress of industrial corporations. These are the so-called Z-Score model (1968) and ZETA® 1977) credit risk model. Both models are still being used by practitioners throughout the world. The latter is a proprietary model for subscribers to ZETA Services, Inc. (Hoboken, NJ). The purpose of this summary are two-fold. First, those unique characteristics of business failures are examined in order to specify and quantify the variables which are effective indicators and predictors of corporate distress. By doing so, I hope to highlight the analytic as well as the practical value inherent in the use of financial ratios. Specifically, a set of financial and economic ratios will be analyzed in a corporate distress prediction context using a multiple discriminant statistical methodology. Through...
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...Index | S/N | Topics | Page No. | 1 | ACKNOWLEDGEMENT | 00 | 2 | Initialization | 01 | 3 | Managerial Decision | 02 | 4 | Z- Score Analyze | 03 | 5 | Z – Score from Financial Statement | 03-09 | 6 | Result Verification | 10 | 7 | Reference | 00 | Initialization Bangladesh Development Bank Limited (BDBL) Bangladesh Development Bank Limited (BDBL) is fully state owned Commercial Bank of Bangladesh. In addition commercial banking, BDBL provides financial and technical assistance to broaden the private as well as public sector industrial base of the country. It prioritizes, especially, Export Oriented/Export Linkage industrial units, Efficient Import Substitution, Joint Ventures, Commercialization of local technology and promotion of agro-based industry. Vision, Mission, Values of the Bank: Vision: To emerge as the country’s prime Financial Institution for supporting private sector industrial and other projects of great significance to the country’s economic development. Also be active participant in commercial banking by introducing new lines of product and providing excellent services to the customers. Mission: * To be competitive with other Banks and Financial Institutions in rendering services ; * To contribute to the country’s socio-economic development by identifying new and profitable areas for investment ; * To mobilize deposit for productive investment ; * To expand branch network in commercially and geographically important places...
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...Predicting Financial Stress 2014MAY – FSA712 Final Project Abstract This research paper will discuss methods used for measuring and predicting financial stress for business enterprises. The accounting literature includes several financial stress prediction models, the most common of which are the Altman Z-Score and Ohlson O-Score. The role of the above models is to focus on the use of financial ratios, earnings measures, market values and cash flow. Models that predict the financial stress of companies can be used as early warning tools meant to direct a company’s management to take necessary corrective action before the company goes into financial difficulty and eventual bankruptcy proceedings. This paper specifically will discuss and analyze the three main financial stress prediction models, the Altman Z-Score, Ohlson’s O-Score and Merton’s Distance to Default. The two selected companies that will be analyzed are Home Depot and Lowes’ Company. The Home Depot, Inc. operates as a home improvement retailer. The Home Depot stores sell various building materials, home improvement products, and lawn and garden products as well as provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me, and professional customers. The company offers installation programs that include flooring, cabinets, countertops, water heaters, and sheds, as well as act...
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...American-Eurasian Journal of Scientific Research 6 (1): 28-31, 2011 ISSN 1818-6785 © IDOSI Publications, 2011 Inquiry Method and Student Academic Achievement in Biology: Lessons and Policy Implications Jacinta A. Opara European School Science Project, 18140 Granada, Spain Abstract: Three research questions with null hypotheses guided the study with the aid of a quasi experimental research design. These students were randomly assigned to two groups (treatment and control group). Treatment group were those taught biology using the sensitized inquiry teaching method while conventional method (lecture) was used for the control group. (1) Biology Achievement Test (BAT) was developed on the following units in biology, flower pollination, muscle structure and function and seed germination. All these were drawn from anatomy and physiology of flowering plants and animal physiology in the biology textbook of SS1, to measure the initial and terminal academic achievement of the students. (2) Lesson notes were prepared on the above mentioned units using the inquiry teaching method and the conventional method using a pre - test, post - test experimental treatment. Thus, it is the contention of the author that the inquiry approach would enhance students’ achievement in biology, hence the thrust of this study. Key words: Inquiry teaching method Conventional method INTRODUCTION Achievement Biology Gender Location explanations from their observations (evidence) by integrating what they...
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...level of significance of the test. 5. Assumptions - Statements about the population(s) being sampled. 6. Calculation of the test statistic and conclusion- Reject H0 if the calculated value of the test statistic falls in the rejection region. Otherwise, do not reject H0 . 7. P-value or significance probability is defined as proportion of samples that would be unfavourable to H0 (assuming H0 is true) if the observed sample is considered unfavourable to H0 . If the p-value is smaller than α, then reject H0 . Remark: 1. If you fix α = 0.05 for your test, then you are allowed to reject true null hypothesis 5% of the time in repeated application of your test rule. 2. If the p-value of a test is 0.20 (say) and you reject H0 then, under your test rule, at least 20% of the time you would reject true null hypothesis. 1. Large sample (n > 30) test for H0 : µ = µ0 (known). Z= x − µ0 ¯ σ √ n Example. A study reported in the Journal of Occupational and Organizational Psychology investigated the relationship of employment status to mental health. Each of a sample of 49 unemployed men was given a mental health examination using...
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...Statistics for Business [pic] Discrete and Continuous Probability Distributions Business Statistics With Canadian Applications Hummelbrunner Rak Gray Third Edition Week6 Pages 261-263 chapter 8 Pages 288-314, 320-325 chapter 9 Arranged by: Neiloufar Aminneia Probability distribution A probability distribution is a list of all events of an experiment together with the probability associated with each event in a tabular form. It is used for business and economic problems. We learned frequency distribution to classify data, relating to actual observations and experiments but probability distribution describes how outcomes are expected to vary. Probability distribution for rolling a true die x P(x) Events Frequencies Probability 1 1 1/6 2 1 1/6 3 1 1/6 4 1 1/6 5 1 1/6 6 1 1/6 Total: 1 [pic] Probability distribution for tossing 3 coins x P(x) Events(# of Heads) Frequencies Probability 0 1 (TTT))...
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...Either the debtor or creditor can fill in the bankruptcy application. In an application filled by the debtor, the debtor must enclose an explanation of his property and its value, information of the total amount of debts and a list of the largest creditors their contact details. In the application the debtor must include an appropriate decision on the transfer of property to bankruptcy. The processing of the creditor’s application begins with notifying the debtor of the application, which is handled by the court. The debtor is given an opportunity to make a written statement by a certain deadline. If the debtor does not give the written statement in time or does not oppose to the creditor’s application, the court shall examine the application and based on the report decide whether legal requirements are set for bankruptcy. (Koulu, 2009a,...
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...QNT-351 Discussion Question Responses * DQ#1: What is the importance of statistics in business decision making? Describe a business situation where statistics was used in making a decision. 1. Using statistics to evaluate the performance of your business. Taking all factors into account, determine whether you are making or losing money. In addition, determine the trend of your business. For example, determine whether, over time, you are making more or less profit (or loss). Track the share of the market that your business holds, and how this changes over time. Evaluate all these factors for each product type, even each model, in your company's line. The statistics to use here are simple line and bar graphs of data. These data can alert you to where you need to change aspects of your business, and how quickly you have to make that change. Furthermore, statistics are an excellent way to determine how you should allocate your resources to increase sales. Sales in a given market are a result of a number of factors, such as pricing, the size of the sales force, and the type and number of advertisements placed. However, these factors will not be equally important for every product. You would use multiple regressions to determine which of these factors are most important, and how much changing your asset allocation (for example, the size of the sales force) will change sales. 2. Statistics: The science of collecting, organizing, and analyzing data. Descriptive Statistics...
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...College ranking and student sorting: Evidence from China Zhigang Li a Chao Wang b School of Economics the University of Hong Kong Abstract China has over 1,000 universities, admitting around 7 million students yearly. Providing information on the school quality may elevate the sorting of students and improve the quality of human capital. In this study, we exploit publicly available university rankings in China and school-major level admission score data to estimate the sorting effect of information provision on school quality. We find evidence that the public ranking of universities significantly affects the decision of students and the outcome of university-student sorting. a b Corresponding author Tel.: +852-9722-3859 E-mail address: zli.economics@gmail.com Corresponding author Tel.: +1-917-9753195 E-mail address: cw1379@nyu.edu Catalogue 1. 2. Introduction.........................................................................................................................3 Admission System in China................................................................................................4 2.1. 2.2. 2.3. 3. An Introduction to the Admission System in China................................................... 4 Impacts of the Admission System in China ............................................................... 4 Admission System in China and Representative Anglophone Countries .................. 5 Estimation Method ..................................
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...Investment Valuation Assignment On Altman’s Z-Score Submitted By: A Sreekanth Vidyasagar Garvit Sharma A Dixit Altman Z-score The Z-score formula for predicting bankruptcy was published in 1968 by Edward I. Altman, who was, at the time, an Assistant Professor of Finance at New York University. The formula may be used to predict the probability that a firm will go into bankruptcy within two years. Z-scores are used to predict corporate defaults and an easy-to-calculate control measure for the financial distress status of companies in academic studies. The Z-score uses multiple corporate income and balance sheet values to measure the financial health of a company. Z score bankruptcy model: Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + .999X5 Explanation X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors....
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...CONTENTS Chapter Page No. 1. Computer Graphics 2.1. Overview 1 2.2. History 1 2.3. Image Types 2 2.4. Computer Animation 4 2.5. Applications Of Computer Graphics 4 2. OpenGL 3.6. What is OpenGL? 5 3.7. Rendering Pipeline 5 3.8. Libraries 7 3.9. Header Files 7 3. System Requirements 4.10. Software Requirements 8 4.11. Hardware Requirements 8 4. Project Details 5.12. Overview of Games 9 5.13. Genres 9 5.14. Classification 10 5. Implementation 6.15. Header Files Used 11 6.16. Functions Used 12 6. Source Code 17 7. Snap Shots 27 8. Conclusion 31 9. Bibliography 32 COMPUTER GRAPHICS Overview The term computer graphics includes almost everything on computers that is not text or sound. Today nearly all computers use some graphics and users expect to control their computer through icons and pictures rather than just by typing. Computer graphics is the field of visual computing, where one utilizes computers both to generate visual images synthetically and to integrate or alter visual and spatial information sampled from the real world. The term Computer Graphics has several meanings: * The representation and manipulation...
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...Explain systematic risk and what is firm-specific risk? Market equity beta measures the covariability of a firm’s returns with all shares traded on the market (in excess of the risk-free interest rate). We refer to the degree of covariability as systematic risk. The market prices securities so that the expected returns should compensate the investor for the systematic risk of a particular stock. Stocks carrying a market equity beta of 1.20 should generate a higher return than stocks carrying a market equity beta of 0.90. Firm-specific risk is any source of risk that does not affect the covariability of a firm’s returns with the market. People examined the analysis of financial risk associated with the use of leverage along the four dimensions, which would be listed later. In these four dimensions, the first two dimensions of risk are firm-specific risk and the third dimension of risk as systematic risk. The four dimensions are: first with respect to time frame: We examined the analysis of a firm’s ability to pay liabilities coming due the next year (short-term liquidity risk analysis) and its ability to pay liabilities coming due over a longer term (long-term solvency risk analysis). The financial ratios examined a firm’s need for cash and other liquid resources relative to amounts coming due within various time frames. Secondly, with respect to the degree of financial distress: We emphasized the need to consider risk as falling along a continuum from low risk to high risk...
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...Search | Find People | A-Z Index | Contact | UR Home Bottom of Form- Quicklinks Navigation - | | * Home Page * Graduate Calendar * Prospective Students * New and Current Students * Thesis/Defense/ Convocation * Faculty and Staff * Forms * Scholarships and Awards * About Us * Contact Us * Hours of Operation * Graduate Listing | U of R » Faculty of Graduate Studies and Research » Applications and Admissions Printer-Friendly VersionApplications and AdmissionsProspective students should review the minimum standards of admission to the Faculty of Graduate Studies and Research (FGSR) before applying to ensure that they possess the qualifications necessary to be considered for admission. Application Procedures for Individual Student Interdisciplinary Application and Special Case Masters (where there is no Established Program)Application Procedures for a Special Case Ph.D. Graduate Program All prospective graduate students who are non-Canadian should review the regulations that apply to International Students.In order to be complete, applications must include the following documents: * an FGSR application form application on-line only * official transcripts from all post-secondary institution attended * two confidential letters of recommendation (print and fill out) * resumé * personal statement of interest * all international applicants must submit proof of English proficiency in the form of an approved test score (ie TOEFL) sent directly...
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... 7. | Land (Own/Lease) | | | | TOTAL | | | | YIELD | | | | AVERAGE PRICE /Q | | | | NET PROFIT | | | III. INTENSITY OF DAMAGE DUE TO INSECTS- Pest | Autumn-Winter(Y/N) | Intensity Of Damage(Low/Med/High) | Spring-Summer | Intensity Of Damage(Low/Med/High | P1 | | | | | P2 | | | | | P3 | | | | | P4 | | | | | OTHERS | | | | | NOTE- 1. P1-FSB, P2- Whitefly, P3-Jassid, P4-Mite 2. Low- 0-10%, Med- 10-40%,High >40% IV. DO YOU USE INSECTICIDE- YES/NO V. INSECTICIDE USAGE PATTERN- Insect | Order of importance | General period Occurrence | Molecule used | Brand | PriceRs./acre | Doseper acre | Time of appl. | Control duration | Criterias considered | Application behaviorN/H | Satisfaction(Y/N) | P1 | | | M1 | | | | | | | | | | | | M2...
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...SPATIAL PROFILE ANALYSIS OF A SECURITY HOLOGRAM FOR FORENSIC APPLICATIONS Sajan Ambadiyil Optical Image Processing & Security Products Centre for Development of Imaging Technology Thiruvanthapuram-695027, Kerala, India ambadycdit@gmail.com Ansiya A.A Optoelectronics and Communication systems Dept. of Electronics & Communication Engineering Sarabhai Institute of Science and Technology Vellanad, Thiruvananthapuram, Kerala, India ansiya.azeez@gmail.com Avinash Jha Oppcorp learning &Development pvt ltd, India avinash.jha@oppcorp.co.in Abstract— This paper proposes a new technique for authentication of hologram. Identity and travel documents, such as national ID cards, driver’s licenses, passports, visas or car registration documents,...
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