Abstract
Over the years, many models have been suggested and tested for predicting bankruptcy. These include ratio analysis models such as Beaver (1966, 2005), discriminant analysis models such as Altman (1968, 2006), regression models such as Ohlson (1980) and others. The Altman model (1968, 2006) is one of the most influential models in the area of bankruptcy prediction. The purpose of this study is to test the accuracy of Edward Altman's Z-Score model in a more recent time period from 2000 to 2005 including more recent years than in which it was developed and previously tested. The study took a large sample of companies that had declared bankruptcy during the period from 2000 to 2005. This sample of companies included companies from many different industries. Further the time period of the study was more recent from 2000 to 2005. The results from the study indicate that the Altman model predicted bankruptcy in a significant majority of the companies that subsequently declared bankruptcy.