- Resumes Atlman Z-score history
- Z’’-score does not take explicitly account of the age of a firm. However Altman (1983) noted that the age of a firm is implicitly considered in the retained earnings/total asset ratio that was regarded as a new ratio of bankruptcy.
- Relatively young firms will probably show low ratio because they didn’t have time to build up cumulative profits
- Evidence form this study shows that the original Z’’-score performs well in an international context. More efficiency can however be extracted from country level using the four original variables plus additional background variables
Distressed Firm and Bankruptcy prediction in an international context
Original by Altman, Malgorzata, 2014, 47 pages
This summary note was posted on 16 January 2017, by Reinie
in Credit risk Finance
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