A Relationship Between Altman’s Z Scores and  Stock Price Performance: A Review on Listed  Companies in Best-30 Index

Mustafa Ozyesil

doi:https://doi.org/10.14445/23939125/IJEMS-V7I2P125

Research Article | Open Access

Volume 7 | Issue 2 | Year 2020 | Article Id. IJEMS-V7I2P125 | DOI : https://doi.org/10.14445/23939125/IJEMS-V7I2P125

A Relationship Between Altman’s Z Scores and Stock Price Performance: A Review on Listed Companies in Best-30 Index

Mustafa Ozyesil

Citation :

Mustafa Ozyesil, "A Relationship Between Altman’s Z Scores and Stock Price Performance: A Review on Listed Companies in Best-30 Index," International Journal of Economics and Management Studies, vol. 7, no. 2, pp. 169-176, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I2P125

Abstract

Conventional financial analysis includes ratios and calculations that are considered to be valid for each firm where they do not develop a model specific to the firm. Therefore, in traditional financial analysis, it is possible that the signals received about the company may be misleading and/or late to take the required measurements. Therefore, a model specific to the company needs to be developed. For this purpose, the Altman Z Score model was developed by Edward Altman in 1968, which analyzes the financial performance of a firm from different aspects instead of a single indicator, and the weighting of indicators can be changed according to the firm. The main objective of this study is to find out whether investors are using z scores in order to perform market timing. Therefore, the new version of the Altman model developed for the emerging countries applied on the non-financialfirms listed in the BIST-30 index, and these firms are classified as risky, safety and grey according to their z scores.In the final section of the application, the relationship between scores and stock returns will be analyzed, and the results obtained for firms will be interpreted.

Keywords

Bankruptcy, Financial Fragility, Financial Analysis, Altman Z-Score, Financial Ratios, Financial Statements Basis Estimation

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