Dissertation Presentation on Application of Altman Z- Score in measuring financial distress of a manufacturing and Non-Manufacturing company by Faijan Mustafa ppt.pptx

1. Under the guidance of:
Mr. Smruty Ranjan Sahoo
DISSERTATION
ON
“Application of Altman Z-Score in Measuring
Financial Distress of a Manufacturing and
Non-Manufacturing Company”
Presented by:-
Faijan Mustafa

2. CONTENTS
 What Is Altman Z- Score
 Altman Z-score Model
Formula
 Objective Of The Study
 Research Mythology
 About Company And
Analysis
Findings
Conclusion
References

3.  What is Altman Z- score model?
 Altman’s Z-score Model is a numerical measurement that
is used to predict the chances of bankruptcy.
 The model was developed by American finance professor
Edward Altman in 1968 as a measure of the financial
stability of companies.
 Altman’s Z-score model combines five financial ratios to
predict the probability of a company becoming insolvent
in the next two years.

4.  Altman’s Z-Score Model Formula:-
For manufacturing industry:-
Z =1.2x1+1.4x2+3.3x3+0.6x4+1x5
For Non-manufacturing industry:-
Z =6.56x1+3.26x2+6.72x3+1.05x4
Where:
Zeta is the Altman’s Z-score
X1 is the Working Capital/Total Assets ratio
X2 is the Net profit/Total Assets ratio
X3 is the Earnings before Interest and Tax/Total
Assets ratio
X4 is the Market Value of Equity/Total Liabilities ratio
X5 is the Total Sales/Total Assets ratio

6.  OBJECTIVE OF THE STUDY:-
To predict the financial health
and viability of the company
using “z” score model.
To analyze the financial condition
of the TATA motors and TCS Ltd.
How Altman z-score find out
solvency of the company.
To know the efficiency in
financial operation of the
company.

7.  RESEARCH METHODOLOGY:-
Primary data: It is a type of
data that is collected by research
directly for main sources.
Secondary data: It is a type of
data that is collected by someone
other than the primary user.
In my research I am use only
secondary data.

8.  Company Profile:-
Tata motors limited is an Indian
multinational automotive
manufacturing company.
Incorporated in 1945
Headquartered in Mumbai,
India.
Which is part of the TATA
group.
The company produces
passenger cars, trucks, vans,
coaches, buses.
Number of employees—
59000+

9. BALANCE SHEET INCOMESTATEMENT

11.  Company Profile:-
Tata consultancy services (TCS) is an
Indian multinational information
technology (IT) services and consulting
company .
Which is founded in 1968.
Its headquarters in Mumbai, Maharashtra.
It is a part of the TATA group and
operates in 150 locations across 46
countries.
 In July 2022, it was reported that TCS
had over 600,000 employees worldwide.

12. BALANCE SHEET INCOME STATEMENT

14.  Findings:-
 The company’s financial health
is sound in case of TCS during 3
Years, the significant findings of
the study are given below.
Working capital to total assets
ratios of the company shows a
highly fluctuating and current
asset is less than current liability.

15. EBIT to total assets ratios of the
company shows a minus figure during
the study period this clearly shows the
company operating earning is not
favorable for year 2022.
The net profit to total assets ratios of
the company shows negative figure
during 2 to 3 year period this clearly
shows the company profit is not
satisfactory over the period.

16.  Conclusions :-
 The final conclusion of the
study is the financial health of
TATA Motors limited is
moderate during the period of
study 2020-2022 and in case of
TATA consultancy services
(TCS) financial health is
sound during the period 2020-
2022 so, company does not
face the bankruptcy in the
future

17.  REFERENCES:-
 www.researchgate.net/publication
 www.wallstreetprep.com/knowledg
e
 https://scholar.google.com/scholar
 https://corporatefinanceinstitute.co
m/resources/commercial-
lending/altmans-z-score-model
 https://www.google.com/search?q=
z+score+wikipedia&oq=z+score