Measuring levels of financial distress using Altman's Z-score
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Date
2012-02-29
Authors
Anyuki, B. K.
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Abstract
This research was carried out among the listed companies in the Nairobi Stock Exchange to determine their levels of financial distress, using Altman's Z-score. The researcher further established that a relationship exists between those levels of financial distress and the stock returns. Since stock returns are easy to find, this relationship will be useful to various stakeholder in the economy. The author has divided the proposal into chapters as follows:
Chapter one: - This consists of the introduction where the author explains background information of the study as well as the statement of the problem, objectives, research hypothesis and significance of the study. Limitations of the study are also included.
In chapter two, the author discusses various aspects on financial distress and the development of Altman's Z-score. Also inclusive in this chapter is the theoretical framework of the model showing the lndependent and dependent variables. Previous relevant researches are also discussed in this chapter.
Chapter three consists of the methodology, where the author explains how the data was collected and finally analysed. Basically secondary data was used and analysis was done using SPSS.
Chapter four and Five discusses the findings, analysis recommendations and areas of further research. The author establishes that Altman's model works in Kenya in measuring levels of distress among firms, and also that their exists a strong positive relationship between stock returns and levels of financial distress. Hence stakeholders can judge from given stock returns, a firm's level of financial distress.
Description
Department of Business Administration, 74p. The HG 4551 .A5 2005
Keywords
Stock price forecasting --Kenya, Business enterprises --Kenya, Stock exchanges --Kenya