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Relationship between the Altman Z-Score and Quick Kralicek Test in Assessing Economic Units

Author

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  • Antoneta Polo
  • Christos Ladias
  • Enkela Caca

Abstract

The existence of the crisis makes obvious the fact of predicting the financial position in which will be found an economic unit in the future. This constitutes one of the most important tasks of analysts. Altman Z-Score andQuick Test Kralicek are two very important cumulative indicators, on the basis of which, the analyst is able to give a judgment on the financial situation in which an economic unit is, as regard to the risk of bankruptcy (Altman Z -Score) and difficulty paying (Quick Test Kralicek). By analyzing these two indicators, it was foundthat they are connected with each other and lead us to the same conclusion for entities taken as a sample in this study. Through a statistical analysis (Pearson correlation coefficient) will be shown this connection and the conclusions derived from this analysis. Predicting in time unsatisfactory situations avoids the risk of bankruptcy, which is so much evident nowadays.

Suggested Citation

  • Antoneta Polo & Christos Ladias & Enkela Caca, 2015. "Relationship between the Altman Z-Score and Quick Kralicek Test in Assessing Economic Units," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, September.
    • Handle: RePEc:eur:ejesjr:41
    DOI: 10.26417/ejes.v3i1.p20-26
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    References listed on IDEAS

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    1. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    2. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 71-111.
    3. Altman, Edward I. & Haldeman, Robert G. & Narayanan, P., 1977. "ZETATM analysis A new model to identify bankruptcy risk of corporations," Journal of Banking & Finance, Elsevier, vol. 1(1), pages 29-54, June.
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    2. Ilirjana ZYBERI & Antoneta POLO, 2021. "Impact Of Service And E-Service Quality, Price And Image On The Trust And Loyalty Of The Electronic Banking Customers," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 59-68, June.
    3. Radojko LUKIC, 2020. "The Analysis of the Financial Risk of Trade in Serbia," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 21(4), pages 518-529, October.

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