PREDICTION FINANCIAL STABILITY OF ROMANIAN PRODUCTION COMPANIES THROUGH ALTMAN Z-SCORE
PREDICTION FINANCIAL STABILITY OF ROMANIAN PRODUCTION COMPANIES THROUGH ALTMAN Z-SCORE

Summary/Abstract: Nowadays, there is a much higher demand for financial and economic analyses in companies that help to face the challenges they face. The analysis is a tool for research, and evaluation of business transformation processes, conditions under which they take place. It also examines the impacts and causal relationships that take place here. Under the current economic conditions, it is necessary to apply new adequate methods in corporate governance that meet market needs and requirements. Prognosis of the development of the financial situation of the company, i.e., the forecast of its future solvency, or insolvency, is based on the evaluation and interpretation of the results achieved today. Financial analysis of the company plays a vital role. The main aim of the research paper is to predict the financial health of the company using Altman's Z score. The work consists of the theoretical part of the financial-economic analysis. In the second chapter, we defined the method and indicators by which we will analyse the selected production companies in Romania. We managed to obtain data from 105 manufacturing companies that have been on the market for at least five years for the analysis, and we focused on the last three years of their activity using Altman's Z score. In the results of the work, we specifically evaluated the financial health of the company using the chosen method. At the end of the paper, we generally evaluated the achieved results by analysis. All the data used in the processing were extracted from professional book literature and provided corporate resources, especially from the balance sheet and profit and loss account.

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