TITLE:
Comprehensive Analysis of Altman’s Z Score, Zmijewski X Score, Springate S-Score and Grover G-Score Model for Predicting Financial Health of Listed Non-Bank Financial Institutions (NBFIs) of Bangladesh
AUTHORS:
Palash Saha, Sujana Ahmed
KEYWORDS:
Financial Distress, Bankruptcy Prediction Model, Non-Bank Financial Institution, Solvency, Dhaka Stock Exchange (DSE)
JOURNAL NAME:
Open Journal of Business and Management,
Vol.12 No.5,
September
14,
2024
ABSTRACT: This study is conducted to evaluate the financial health of Non-Bank Financial Institutions (NBFIs) in Bangladesh and to point out financially distressed companies through the use of different models. The study also determined whether is there any distinction in the result of different models for anticipating the insolvency of 21 NBFIs listed in Dhaka Stock Exchange (DSE) before 2012. Panel data (a mixture of time series and cross-section data) have been utilized. According to Altman’s Z score 48% (10 companies) of the total operating NBFIs of Bangladesh are facing the threat of insolvency, Zmijewski X score shows that 62% or 13 firms are in threat, Springate S score identifies 52% or 11 firms and Grover G score pinpoints 48% as financially distressed organizations. There are seven companies to face probable bankruptcy. Models which have been utilized here have correctly identified the 2 organizations such as ILFSL and PLFSL as prone to bankruptcy. Zmijewski x score model indicates financial distress better than other models for the NBFIs listed on DSE. Scholars can depend on the outcome and further research through the addition of other insolvency prediction models. Authorities, shareholders and decision-makers can utilize this study for taking preventive measures along with making future investment decisions.