Z-Score Models’ Application to Italian Companies Subject to Extraordinary Administration

Posted: 8 Jun 2013

See all articles by Edward I. Altman

Edward I. Altman

New York University (NYU) - Salomon Center; New York University (NYU) - Department of Finance

Alberto Falini

University of Brescia - Department of Economics

Alessandro Danovi

University of Bergamo (Italy)

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2013

Abstract

It is normal for companies, during their life cycle, to alternate between positive and negative phases, periods of success and failure. When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to go bankrupt. The uncertainty regarding the exact moment when this takes place has brought about a plethora of quantitative and qualitative models aimed at predicting bankruptcy. This study applies the most well-known of these models, the Z-Score, through an application to Italian companies subject to extraordinary administration between 2000 and 2010. The results confirm a good predictive effectiveness, though Italian peculiarities could require the development of ad hoc parameters.

Keywords: Z- Score, Default, Bankruptcy

JEL Classification: G30, G33

Suggested Citation

Altman, Edward I. and Falini, Alberto and Danovi, Alessandro, Z-Score Models’ Application to Italian Companies Subject to Extraordinary Administration (May 1, 2013). Bancaria No. 04-2013, Available at SSRN: https://ssrn.com/abstract=2275390

Edward I. Altman

New York University (NYU) - Salomon Center ( email )

44 West 4th Street
New York, NY 10012
United States
212-998-0709 (Phone)
212-995-4220 (Fax)

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

Alberto Falini

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

Alessandro Danovi (Contact Author)

University of Bergamo (Italy) ( email )

Piazza Rosate 2
I-24100 Bergamo, 24127
Italy

HOME PAGE: http://www.unibg.it

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