Reviewing and Clarifying the Implementation of Z-Score Bankruptcy Model on Food and Beverage Industries at Stock Exchange

One of the tools used for making investment in a firm is the bankruptcy prediction model. Investors always want to avoid the risk of losing their own capital and its profit by predicting the bankruptcy possibility of a company. The present paper tries to offer a model for bankruptcy prediction in food and beverage industry, to determine the success possibility of this model in true prediction of bankruptcy in food and beverage industry at stock exchange, and to implement bankruptcy model with regard to the information of food and beverage companies not listed in stock exchange. The variables referred to in the paper include: X1: Working Capital /Total Assets X2: Retained Earnings /Total Assets X3: Earnings before Interest and Taxes /Total Assets X4: Market Value of Equity /Total Liabilities Finally, it is concluded that the companies in which Z is larger than zero (Z>0) are non-bankrupt and the companies in which Z is smaller than zero (Z<0) are known as bankrupt.

bankruptcy model, food and beverage industry, stock exchange