Examining The Financial Distress In Selected Indian Pharmaceutical Companies By Applying The Altman’s Z Score Model

Abstract

Purpose: The necessity for financial analysis is growing as a result of industrialization, trade, and commerce. Predicting financial difficulties has become a key concern for all firms since the financial crisis happened in 2008. Approach/Methodology/Design: For assessing a company's financial health and the likelihood of insolvency, employ Altman’s Z-score model. Early bankruptcy prediction is vital for both the parties involved in the company and society. Based on their sales in the year 2021-2022, the top five pharmaceutical companies listed on the Bombay Stock Exchange were chosen as a sample for this study. The period of the study is five years, from 2017-2018 to 2021-2022. Findings: For this study, secondary data is employed. The collected data was examined by using Altman's "Z" score model in Microsoft Excel. Originality/value: The results show that the average Z-score for the pharmaceutical sector over the course of the study was greater than 4.5, which is significantly greater than the threshold value of 1.8