Application of Altman Bankruptcy prediction model in Ghana
The study examined the applicability of the Altman Z-score model in predicting bankrupt companies or financially distressed companies on the Ghana Stock Exchange. A sample 10 listed firms were selected and one other company to be used for validation purposes. The validation process involved data for...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Master Program in Economics, Graduate Program of Universitas Jambi
2019-08-01
|
| Series: | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| Online Access: | https://online-journal.unja.ac.id/JES/article/view/7558 |
| _version_ | 1828297141293940736 |
|---|---|
| author | Alhassan Musah Josephine Agyimaa Agyirakwah |
| author_facet | Alhassan Musah Josephine Agyimaa Agyirakwah |
| author_sort | Alhassan Musah |
| collection | DOAJ |
| description | The study examined the applicability of the Altman Z-score model in predicting bankrupt companies or financially distressed companies on the Ghana Stock Exchange. A sample 10 listed firms were selected and one other company to be used for validation purposes. The validation process involved data for 2016 and 2017 for Aluworks which represented a distressed company and GOIL Ghana Limited which represented non-distressed company. The final analysis was based on a random sample of 10 listed firms using their 2017 financial statement. The results of the initial prediction showed 50 percent of the companies were correctly predicted whiles the others were misclassified. Additional analyses showed that the size of the company influence the probability of bankruptcy whiles the nature of the business does not. The conclusion drawn shows that the Altman Z-score cannot accurately predict financially distressed firms in Ghana but can still be useful in giving signals. |
| first_indexed | 2024-04-13T12:21:39Z |
| format | Article |
| id | doaj.art-89562b727d9649348600720afdde9a74 |
| institution | Directory Open Access Journal |
| issn | 2338-4603 2355-8520 |
| language | English |
| last_indexed | 2024-04-13T12:21:39Z |
| publishDate | 2019-08-01 |
| publisher | Master Program in Economics, Graduate Program of Universitas Jambi |
| record_format | Article |
| series | Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| spelling | doaj.art-89562b727d9649348600720afdde9a742022-12-22T02:47:11ZengMaster Program in Economics, Graduate Program of Universitas JambiJurnal Perspektif Pembiayaan dan Pembangunan Daerah2338-46032355-85202019-08-017110.22437/ppd.v7i1.75587558Application of Altman Bankruptcy prediction model in GhanaAlhassan Musah0Josephine Agyimaa Agyirakwah1Academic City College, Accra, GhanaKwame Nkrumah University of Science and Technology, Kumasi, GhanaThe study examined the applicability of the Altman Z-score model in predicting bankrupt companies or financially distressed companies on the Ghana Stock Exchange. A sample 10 listed firms were selected and one other company to be used for validation purposes. The validation process involved data for 2016 and 2017 for Aluworks which represented a distressed company and GOIL Ghana Limited which represented non-distressed company. The final analysis was based on a random sample of 10 listed firms using their 2017 financial statement. The results of the initial prediction showed 50 percent of the companies were correctly predicted whiles the others were misclassified. Additional analyses showed that the size of the company influence the probability of bankruptcy whiles the nature of the business does not. The conclusion drawn shows that the Altman Z-score cannot accurately predict financially distressed firms in Ghana but can still be useful in giving signals.https://online-journal.unja.ac.id/JES/article/view/7558 |
| spellingShingle | Alhassan Musah Josephine Agyimaa Agyirakwah Application of Altman Bankruptcy prediction model in Ghana Jurnal Perspektif Pembiayaan dan Pembangunan Daerah |
| title | Application of Altman Bankruptcy prediction model in Ghana |
| title_full | Application of Altman Bankruptcy prediction model in Ghana |
| title_fullStr | Application of Altman Bankruptcy prediction model in Ghana |
| title_full_unstemmed | Application of Altman Bankruptcy prediction model in Ghana |
| title_short | Application of Altman Bankruptcy prediction model in Ghana |
| title_sort | application of altman bankruptcy prediction model in ghana |
| url | https://online-journal.unja.ac.id/JES/article/view/7558 |
| work_keys_str_mv | AT alhassanmusah applicationofaltmanbankruptcypredictionmodelinghana AT josephineagyimaaagyirakwah applicationofaltmanbankruptcypredictionmodelinghana |