International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

A Revisited of Altman Z- Score Model for Companies Listed in Bursa Malaysia
Siew Bee Thai, Han Hwa Goh, Boon HengTeh, JiaChian Wong, Tze San Ong

This study uses Discriminant Analysis as a crucial methodology to predict financial distress of the companies in Malaysia. 30 companies which consist of 15 financial distress company and another 15 non-financial distress company were analyzed. Financial statements of each company is collected five years before the companies are classified as PN17 in Bursa Malaysia. Five financial ratios which exist in the Altman Z-score model are computed and tested with Discriminant Analysis. As a result, working capital to total assets is the most significant variable that discriminates between PN17 and non-PN17 companies. Besides that, MDA has achieved an accuracy rate of 76.7% to predict financial distress companies in Malaysia.

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