Financial Soundness of Maharatna Companies: Application of Altman Z Score Model

Authors

  •   Shyamsunder Chitta Associate Professor, Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Hyderabad - 509 217
  •   Ravi Kumar Jain Director, Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Hyderabad - 509 217
  •   R. Sriharsha Business Analyst, Hexaware Technologies, Chennai

DOI:

https://doi.org/10.17010/ijf/2019/v13i10/147745

Keywords:

Altman Z score

, Maharatna, Navaratna, PSUs, Bankruptcy.

JEL Classification Codes

, C53, G17, G21, G32, G33.

Paper Submission Date

, September 10, 2019, Paper Sent Back for Revision, September 19, Paper Acceptance Date, September 22, 2019.

Abstract

Maharatna companies are the top most PSUs contributing greatly to the development of our nation and have existed for a long time and became self-sustained without depending on the government for funds. Recently, some of the companies have started losing profits continuously and are on the verge of bankruptcy. The government has been infusing funds to safeguard them, but is not able to improve their performance to the desired level. The purpose of this paper was to study the financial situation of eight Maharatna companies by applying the famous Altman Z score model to verify whether these companies really suffered financially during the period from 2014 to 2018. It was found that not all the Maharatna companies were performing as expected.

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Author Biography

Shyamsunder Chitta, Associate Professor, Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Hyderabad - 509 217

ORCID Id: 0000-0002-6266-4756

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Published

2019-10-31

How to Cite

Chitta, S., Jain, R. K., & Sriharsha, R. (2019). Financial Soundness of Maharatna Companies: Application of Altman Z Score Model. Indian Journal of Finance, 13(10), 22–33. https://doi.org/10.17010/ijf/2019/v13i10/147745

Issue

Volume 13, Issue 10, October 2019

Section

Articles
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