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Measuring Financial Soundness of Selected Cement Industries in Bangladesh

Author

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  • Sharifa Akter Nipa

    (Begum Rokeya University, Rangpur)

Abstract

Financial stability is a current concern for the industries in Bangladesh because of the recent COVID-19 pandemic. Cement industries are important for the construction industry. In this study,the researcher attempted to figure out the financial soundness of the cement industries in Bangladesh by examining the Altman Z-score model. In this research,seven cement industries are considered which are listed in the stock market of Bangladesh. In the case of estimating this score, the author highlighted overall calculations including three basic pillars of finance- liquidity, profitability, and solvency ratios. The result suggested that out of seven industries, two were in a healthy zone whereas others were into bankruptcy with poor profitability, risky investing vs saving management, and macroeconomic pressure on the supply chain resulting in high and exporting-oriented raw material.This paper can give a brief overview of the financial condition of the cement industry and policymakers can find out ways to improve the overall situation through several stringent but practical policy taking.

Suggested Citation

  • Sharifa Akter Nipa, 2024. "Measuring Financial Soundness of Selected Cement Industries in Bangladesh," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3), pages 142-157, March.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:3:p:142-157
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    References listed on IDEAS

    as
    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. Jože P. Damijan, 2018. "Corporate financial soundness and its impact on firm performance: implications for corporate debt restructuring in Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 30(2), pages 156-192, March.
    3. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    4. Alessandro Bitetto & Paola Cerchiello & Charilaos Mertzanis, 2021. "A data-driven approach to measuring financial soundness throughout the world," DEM Working Papers Series 199, University of Pavia, Department of Economics and Management.
    5. Mr. Fabian Valencia & Mr. Luc Laeven, 2012. "Systemic Banking Crises Database: An Update," IMF Working Papers 2012/163, International Monetary Fund.
    6. A. N. K. Mizan & Md. Mahabbat Hossain, 2014. "Financial Soundness of Cement Industry of Bangladesh: An Empirical Investigation Using Z-score," American Journal of Trade and Policy, Asian Business Consortium, vol. 1(1), pages 16-22.
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