An application of Altman Z-score model to analyze the bankruptcy risk: cases of multidisciplinary enterprises in Vietnam

  • Received October 21, 2019;
    Accepted November 27, 2019;
    Published December 6, 2019
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  • DOI
    http://dx.doi.org/10.21511/imfi.16(4).2019.16
  • Article Info
    Volume 16 2019, Issue #4, pp. 181-191
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This study applied Altman Z-score model to assess the bankruptcy risk of a set of multidisciplinary enterprises of various types, mainly small and medium enterprises, with data taken from official financial reports of 180 enterprises in Soc Trang province. The binary logistic regression was employed to assess the impact of non-financial and financial factors on the bankruptcy risk of enterprises. The research findings showed that both the non-financial factors such as business area, types and size of the business, the educational level of managers and executors and other characteristics, and the financial factors (indicators) such as earnings before tax, net profit/equity ratio, earnings before interest and tax/total assets ratio, equity/total debt ratio, affect the bankruptcy risk of enterprises. Predicting the bankruptcy risk and measuring its determinants play an important role not only as an effective managing tool of the business, but also as evidence for policymakers to support the sustainable development of business.

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    • Table 1. Bankruptcy risks of enterprises by industries
    • Table 2. The difference in bankruptcy risk between business fields
    • Table 3. The bankruptcy risks by types
    • Table 4. The difference in bankruptcy risk between types of enterprises
    • Table 5. Determinants of bankruptcy risk in the binary logistic model