Assessing Financial Strength Through Altman’s -Z Score Model: A Case Study of Yash Metallics Pvt. Ltd., Kolhapur

Abstract

Financial health of business is very important for the costs of financial distress are typically classified stakeholders of the business including internal and as either direct or indirect. Predicting financial distress is a very influential tool which can help both corporations and investors in making intelligent and prudent decisions. It helps managers to take preventive actions in order to save the firm from falling prey to distress. They can improve the situation and try to find solutions before the condition gets worse. There are many ways to measure the financial strength of a foundry. Altman Z-Score is the most efficient model to judge the financial failure of the companies. This study assesses financial strength through Altman’s Z-Score, and Liquidity and Solvency ratio. For the study, data have been collected through annual reports from the year 2004–05 to 2010–11. The results of the study showed that liquidity position of the foundry in all over period had a strong financial position and quite enough liquid assets to maintain business operations. Foundry could pay its current liabilities with its current assets during the period. In the study period, “Z” score was above 3.00 which meant that foundry was having very good financial position throughout the period and foundry is financially safe. Its overall result indicates that the financial position of the selected unit is significantly strong.