Assessment Of Financial Health Condition Of Automobile Industry In India Using Altman’s “Z” Score
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Abstract
I was inspired by some of the research works done on Edward Altman’s Z score on evaluating the financial health conditions of some of the companies listed in the Indian Stock Exchanges. In this article, I have taken Automobile Industry (two wheeler) for assessing the financial conditions and provide valuable information to various interested parties. Stakeholders of a business organization require vital information about the financial health condition of a business organization with which they deal. Such information enables them to make profitable decisions whether to invest their savings or withdraw their investments from the business organization.
Edward Altman devised a tool to assess the financial health condition of a business organization with the help of “Z” Score. Though, ratio analysis helps the stakeholders to understand the financial condition of a firm, but the ratio analysis alone cannot help to provide the overall financial condition of a firm. Z score takes into account all important statistical information from the financial statements of a firm and measures the financial soundness of a firm.
In this research work, I have taken Hero Motors Corporation, Bajaj Auto Limited, TVS Motors Limited and Maharashtra Scooters Limited for analysis purpose. Financial statements of the all companies were taken from 2003-04 to 2014-15. I have used tables and graphs for effective understanding.
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