Manufacturing Industry Financial Condition of the City of Rostov-On-Don: Examine by the Altman Models

Gasanov, Oscar and Chirskaya, Marina (2021): Manufacturing Industry Financial Condition of the City of Rostov-On-Don: Examine by the Altman Models. Published in: International Scientific and Practical Conference Operations and Project management: strategies and trends DITEM 2021: Strategies and Trends in Organizational and Project Management , Vol. 380, (2 February 2022): pp. 488-499.

Abstract

In the context of continuing population growth in regional centers, one of which is the city of Rostov-on-Don, industrial enterprises of the city are becoming important as centers of job creation. The reduction in the number and volume of output of industrial enterprises in the city has significant dimensions. This study is scoped at assessing the financial stability of industrial enterprises that continue to operate in the city using the Altman Z-score models, which have proven their effectiveness in the probability of bankruptcy at the global level. The study was conducted on a sample of ten industrial enterprises in the manufacturing industry. Two Altman Z-score models were used as tools: for private enterprises in the industrial sector, and for enterprises from emerging markets. The results of the analysis suggest that the Z-model for private industrial companies is better suited for assessing the financial stability of the manufacturing industry companies. The use of the classic Z-score model and the emerging market Z-score model has some limitations. Assessment of financial stability based on Altman models indicates a good and satisfactory financial condition of the majority of industrial enterprises in the city. As a result of the Altman Z-score models assessment, it was found that the main variables that negatively affect the final results of the Z-score are the long-term functioning of economic entities with negative financial results and negative net working capital.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Stability, Bankruptcy, Manufacturing Industry, Altman’s Z-Score.
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance; G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General; G - Financial Economics > G3 - Corporate Finance and Governance > G33 - Bankruptcy ; Liquidation

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