This study tests the accuracy of the Altman
bankruptcy prediction model for a wide private companies’ samplethat went bankrupt in the
years 1985 to 2013. Financial ratios used in the model calculations, Z’-Score
(Altman’s Z for private companies) also provide useful information on the
solvency and probability of bankruptcy for privately held companies from the
sample. The findings do not support the assertion that the Z’-Score can be
generalized to countries and sectors different from industrial sector. The
general number of bankruptcies may be an antecedent variable to certain
economic and/or financial crises, but the results indicate a correct
identification of bankruptcy risk only to two thirds of the sample of
companies.
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