Z Score Estimation for Indian Banking Sector

Abstract

Abstract-From traditional times the Z score values have been constantly used for prediction of Bankruptcy. This has been vital to both the lenders and investors whose returns are based on solvency estimates. The terms of credit have gone a U turn from the traditional times to the modern scenario today. The basic concern of prediction is to evaluate the terms of credit and ensure repayment safely. Z score has been used as a tool to evaluate the credibility of the firms. This paper provides the Z score value for the public sector banks. This value is useful when these banks demand loans from the RBI or any other funding agency. The usage of back propagation neural network is to forecast the internal parameters of Z score and then use these internal parameters to forecast the Z score value up to 2020. Thus the paper emphasizes the usage of BPNN for prediction of bankruptcy for public sector banks in India.  Index Terms-Bankruptcy, internal parameters of Z score Prediction, Z score value.

Financial Health & Corporate Performance – a Comparison of Manufacturing Companies in China & India

“…This study adopts the widely used Altman (1968) Z-Score model Campbell, 2010A and2010B;Pradhan, 2014;Gunathilaka, 2014;Thai, Goh, Teh, Wong and Ong, 2014) to determine financial health. The Z-Score formula is provided in Figure 1.…”

“…These studies include Hong Kong and Singapore (Foo, 2015), China Campbell, 2010A and2010B), India (Pradhan, 2014), Sri Lanka (Gunathilaka, 2014), and Malaysia (Thai, Goh, Teh, Wong and Ong, 2014). The Altman Z-Score (Altman, 1968) was the preferred measure of financial health in these studies.…”

“…Unlike studies by Sherbo and Smith's (2013), Zhao (2013), Pradhan, (2014), and Thai, Goh, Teh, Wong and Ong (2014) which applied the Z-Score on individual market or jurisdiction, this study explores the comparative relationship between financial performance and corporate health between two leading markets in the Asia Pacific region, namely China and India.…”

Bankruptcy Via Earning Volatility: Does it Integrate in Financial Institutions?

“…On the other hand, low scores directed financial distress. To measure the financial distress of the firm, Z-score was also used by Jan and Marimuthu (2015) Poston et al (1994) and so on. Grice and Ingram (2001) concluded in his study that Altman"s Z-score model had about 70%-80% reliability in predicting bankruptcy.…”

Financial analysis and credit solvency evaluation of a selected enterprise case study of a company 'Aleva Novi Knezevac'

“…Roli Pradhan (Pradhan, 2014) je analizirala primenu "Z" modela na bankarski sektor Indije i zaključila (str. 517) da je na jednoj od tri analizirane banaka (analizirane su tri najlikvidnije banke u Indiji), vrednost "Z" skora najviša, te da "Z" model sugeriše blisko predviđanje budućeg uspešnog poslovanja U nastavku ćemo analizirati finansijske izveštaje domaćeg preduzeća "Aleva" ad iz Novog Kneževca.…”