Financial Distress Prediction through Altman Z-Score Model: A Case Study of State Owned Commercial Banks of Bangladesh

Indian Journal of Commerce and Management Studies

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Field Value
 
Title Financial Distress Prediction through Altman Z-Score Model: A Case Study of State Owned Commercial Banks of Bangladesh
 
Creator ., Subrata Deb Nath
., Prasenjit Kumer Biswas
., Md. Aminur Rashid
., Munna Rani Biswas
 
Subject
Altman Z-score, financial distress, prediction, state owned commercial banks
 
Description Purpose: Banks are the backbone of the economy. The bank collects money temporarily from the public and lends to other people as per need. Banks should concern about the soundness of their financial health. The purpose of this study is to predict the financial health of the State Owned Commercial Banks (SOCBs) of Bangladesh using Altman Z-score Model. Methodology: The Z-score uses working capital to total assets, retained earnings to total assets, earnings before interest and tax to total assets, shareholders equity to total liabilities to measure the financial health of the banks. The study is analytical in nature and is carried out based on only secondary data. The published Annual Reports of the six SOCBs for the period of 2010-2018 collected for secondary data and financially analyzed through Altman Z-score Model for prediction of financial distress. Findings: The study found that with only one exception, the financial health of the SOCBs is unsatisfactory. One exception is only Bangladesh Development Bank which fell into grey zone among the six SOCBs as it secured on an average 1.52 score. However, the remaining others are found in Distress zone as they secured on an average 1.10 score. Hence, it is said that the financial health of the Basic Bank Limited is the worst and BDBL is the best among the six banks. Implications: The implication of the study is that respective authority of the SOCBs of Bangladesh can use the findings of the study to take necessary actions for financial distress.
 
Publisher Indian Journal of Commerce and Management Studies
 
Contributor ERM Publications, India
 
Date 2020-10-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://scholarshub.net/index.php/ijcms/article/view/537
 
Source Indian Journal of Commerce and Management Studies; Vol 11, No 3 (2020)
22295674
22490310
 
Language eng
 
Relation http://scholarshub.net/index.php/ijcms/article/view/537/522
 
Rights Copyright (c) 2020 Indian Journal of Commerce and Management Studies
https://creativecommons.org/licenses/by-sa/4.0
 

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