A Relationship Between Altman’s Z Scores and Stock Price Performance: A Review on Listed Companies in Best-30 Index

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 2

Year of Publication : 2020

Authors : Mustafa Ozyesil

10.14445/23939125/IJEMS-V7I2P125

How to Cite?

Mustafa Ozyesil, "A Relationship Between Altman’s Z Scores and Stock Price Performance: A Review on Listed Companies in Best-30 Index," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 2, pp. 169-176, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I2P125

Abstract:

Conventional financial analysis includes ratios and calculations that are considered to be valid for each firm where they do not develop a model specific to the firm. Therefore, in traditional financial analysis, it is possible that the signals received about the company may be misleading and/or late to take the required measurements. Therefore, a model specific to the company needs to be developed. For this purpose, the Altman Z Score model was developed by Edward Altman in 1968, which analyzes the financial performance of a firm from different aspects instead of a single indicator, and the weighting of indicators can be changed according to the firm. The main objective of this study is to find out whether investors are using z scores in order to perform market timing. Therefore, the new version of the Altman model developed for the emerging countries applied on the non-financialfirms listed in the BIST-30 index, and these firms are classified as risky, safety and grey according to their z scores.In the final section of the application, the relationship between scores and stock returns will be analyzed, and the results obtained for firms will be interpreted.

Keywords:

Bankruptcy, Financial Fragility, Financial Analysis, Altman Z-Score, Financial Ratios, Financial Statements Basis Estimation

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