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The impact of the Altman score on the energy sector companies

Author

Listed:
  • Maria-Lenuţa Ciupac-Ulici

    (IPAG Business School, Paris, France; Hyperion University, Bucharest, Romania)

  • Daniela-Georgeta Beju

    (Babeș-Bolyai University, Cluj-Napoca, Romania)

  • Ioan-Alin Nistor

    (Babeș-Bolyai University, Cluj-Napoca, Romania)

  • Flaviu Pișcoran

    (Bogdan Vodă University, Cluj-Napoca, Romania)

Abstract

The financial literature regarding bankruptcy prediction models includes the application of several statistical tools which have progressively become accessible. This paper explores the impact of the Altman score on the stock prices of the Romanian companies listed on the Bucharest Stock Exchange during the period 2014-2022. The Altman score is calculated based on the annual reports of the analyzed companies collected from the Bloomberg database, while the stock exchange prices are collected from the Euromonitor database. The methodology used in the analysis is panel regression realized with the Generalized Method of Movements technique. The data is processed using the EViews software. This research study shows that there is a negative correlation between the Altman Z score and the companies’ share price. In terms of theoretical contribution, this study investigates one of the bankruptcy prediction models that is used more often than other models, namely the Altman Z-Score. Keywords: Altman score; stock price; bankruptcy; Romania.

Suggested Citation

  • Maria-Lenuţa Ciupac-Ulici & Daniela-Georgeta Beju & Ioan-Alin Nistor & Flaviu Pișcoran, 2023. "The impact of the Altman score on the energy sector companies," Journal of Financial Studies, Institute of Financial Studies, vol. 8(Special-J), pages 45-56, June.
    • Handle: RePEc:fst:rfsisf:v:8:y:2023:i:special-june_2023:p:45-56
    DOI: 10.55654/JFS.2023.SP.03
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    More about this item

    Keywords

    altman score; stock price; bankruptcy; romania.;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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