FINANCIAL FAILURE ESTIMATE IN BIST COMPANIES WITH ALTMAN (Z-SCORE) AND SPRINGATE (S-SCORE) MODELS

Abstract

The aim of this paper is to measure financial failure level of 7different sector which is on the BIST index in the period of 2014-2016 andenable to compare the level of financial failure by years. Thus, it is to test whether any leading indicator, which gives early warningin detection of companys financial failure exists or not. In this sense,financial data of 166 companies which are registered in BIST comprises thesample of the study. The acquired data was measured by the easily computableand understandable Altman (Z-Score) and Springate (S-Score) models, which givesuccessful results in forecasting the bankruptcy and financial failures. As aresult of the analysis, Altman model shows that 115 (%69) out of 166 companiesare not under financial stress while Springate model demonstrates that 95 (%57)companies. Both of the models indicate different levels of financial failure.Hovewer, similar results are found when analysis of companies are made byyears.

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