Financial distress prediction of listed companies – empirical evidence on the Vietnamese stock market

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Financial distress is a matter of concern in the recent period as Vietnam gradually enters global markets. This paper aims to examine the factors of Altman Z-score to detect the financial distress of Vietnamese listed companies. The authors use a sample of 30 delisted companies due to financial problems and 30 listed companies on the Vietnamese stock market from 2015 to 2018. They employ Independence Samples T-test to test the research model. It is found that there are significant differences in the factors of Altman Z-score between the group of listed companies and the group of delisted companies. Further analyses using subsamples of delisted companies show that the factors of Altman Z-score are also statistically different between companies with a low level of financial distress and those with a high level of financial distress. Based on the results, there are some suggestions to assist practitioners and the State Securities Commission in detecting, preventing, and strictly controlling financially distressed businesses. These results also enable users of financial statements to make more rational economic decisions accordingly.

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    • Figure 1. Elements of the sample
    • Table 1. Descriptive statistics of Group 1 and Group 2
    • Table 2. Independence Samples T-test results of Group 1 and Group 2
    • Table 3. Descriptive statistics of Group 1a and Group 1b
    • Table 4. Independence Samples T-test results of Group 1a and Group 1b
    • Table A1. List of 30 listed companies on Vietnamese stock market from 2015 to 2018
    • Table A2. List of 30 cancelled listing companies on Vietnamese stock market from 2015 to 2018
    • Formal Analysis
      Tran Quoc Thinh
    • Project administration
      Tran Quoc Thinh
    • Supervision
      Tran Quoc Thinh
    • Writing – original draft
      Tran Quoc Thinh
    • Conceptualization
      Dang Anh Tuan
    • Funding acquisition
      Dang Anh Tuan
    • Resources
      Dang Anh Tuan
    • Writing – review & editing
      Dang Anh Tuan
    • Investigation
      Nguyen Thanh Huy
    • Methodology
      Nguyen Thanh Huy
    • Software
      Nguyen Thanh Huy
    • Data curation
      Tran Ngoc Anh Thu
    • Validation
      Tran Ngoc Anh Thu
    • Visualization
      Tran Ngoc Anh Thu