This study is an effort to identify the best financial and accounting variables which preeminently discriminate bankrupt companies form non-bankrupt companies, to develop

Z-Score model through a procedure identical to that of Altman's (1968) using multivariate statistical technique of discriminant analysis and logit model to provide a reliable tool as Internal rating bases (IRB) model in Pakistani context to banking industry for the credit evaluation of corporate loan applicants.

Bandyopadhyay (2006) developed

Z-score model for Indian corporates by using working capital/total assets, cash profits/total assets, total non-current and current borrowings/total assets, operating profit/total assets, and sales/total assets ratios, and compared the results with Altman's 4 and 5 ratios models, and found his new Z-score had higher prediction accuracy both for solvent and defaulted firms.

Can Altman

Z-Score Models Predict Business Failures in Greece.

Altman-Nammacher (1987) suggest that a modified

Z-score model used to predict bankruptcy can also be used to predict default for these high-yield bonds or as a gauge of changes in credit quality.

Note that if the book value variation of the

Z-score model was used instead (substituting the book value of equity of $156.

The original

Z-score model was revised and modified several times in order to find the scoring model more specific to a particular class of firm (for a detailed presentation of the different developments please refer to Altman and Narayan, 1997 and Altman, 2000).

The following UK-based

z-score model of Taffler (1983, 1984) and Agarwal and Taffler (2007) employed in this study is derived in a similar way to Altman (1968) using a discriminant modeling approach:

Such a model is also known as Zeta function or a

Z-score model.

Stern School of Business and the inventor of

Z-Score model.

Techniques used for analyzing the data was

Z-score model, mean, standard deviation, co-efficient of variation and graphs.

As such, the

Z-Score model, which was originally intended to track the possibility of domestic manufacturing company bankruptcies, was updated and re-released in the mid-1990s.

By means of his analytical method he got the following formula known as the Altman's bankruptcy predictive model or the

Z-Score model, which is used for companies listed at the capital market: