The analysis of Altman Z-score for 290 companies from BSE 500 index in Heckyl Risk Analytics System (RAS) revealed that Automobiles, Utilities and Industrials sectors have led the volume of distressed companies in the financial year 2020.
The Altman Z-score is the output of a credit-strength test that gauges the company’s likelihood of bankruptcy. This score measures the performance of the company on profitability, leverage, liquidity, solvency, and activity to predict whether the organization has a high probability of becoming bankrupt.
Based on the value of Altman Z-score, the company cab be classified into three zones. A Z-score above 2.99 suggests that a company is in the safe zone. A Z-score between 1.8 and 2.99 is in the grey zone which suggests there is a good chance of the company going bankrupt. Meanwhile, a Z-score below 1.80 is in the distress zone which indicates a high probability of distress.
Here, we present some of the highlights of Altman Z-score analysis for 290 companies from BSE 500 index which have declared the annual results for the financial year 2020:
#1. Manappuram Finance, Shoppers Stop and Bombay Dyeing fall into Distressed category
#2. Tejas Networks, HEG and AllCargo Logistics slip into Grey zone
#3. Distressed Cholamandalam Investment, Reliance Capital and Can Fin Homes register further Deterioration
Heckyl RAS does all the heavy-lifting to save the time spent by the risk teams at the banks on the collection of various datasets and complex number crunching and thereby helping them to spend quality time on the ready to use output of business rules, financial modules and risk scores.
Heckyl RAS is the first of its kind innovative application that offers a 360-degree view on the portfolio of companies and individuals through analysis of the traditional and alternative datasets.
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