A Study on Forecasting of Default Probability of Auto Component Manufacturers in Chennai

Authors

  • V. Hariharan
  • N. Thangavel

Abstract

The auto Component manufacturers like other industries is nowadays facing a lot of challenges due to various macro environmental factors and other operating issues. Over the past few years, the auto component manufacturer’s profitability is declined due to increasing raw material cost and financial expenses. On account of above factors, the auto component manufacturers facing severe liquidity problems and leads to bankruptcy. Forecasting bankruptcy is important for investor and other stakeholders to take appropriate decision on making investments. Identification of probability of default may avoid various problems in the near future & may shelter the company from Bankruptcy situation. If the financial distress was predicted ahead of time, stakeholders of the companies have the ability to secure their company and could take necessary action to mitigate the risk and perhaps avoid bankruptcy itself. The financial health of the firm shall be established with detailed ratios analysis and using other Financial analytical tool. The analysis establishes the financial performance of a firm by evaluating its operational and financial status. For this specific study, we are trying to analyse the probability of bankruptcy of automobile dealer companies using Altman’s Z-Score Model and their score. This study aims to evaluate the financial distress of the auto component manufacturers in Chennai

Downloads

Published

2020-04-05

Issue

Section

Articles