IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025issue-14p746-759.html

Survival Prediction of Nigerian Listed Agriculture Companies: The Use of Altman Z-Score Models

Author

Listed:
  • Olabisi Michael Oyinlola

    (Osun State Polytechnic, Osun State, Nigeria)

  • Oladosu Jimoh Balogun

    (Osun State Polytechnic, Osun State, Nigeria)

  • Oyetayo Oyewale Folajin

    (Osun State Polytechnic, Osun State, Nigeria)

  • Nafisat Toyosi Muhammed

    (Osun State Polytechnic, Osun State, Nigeria)

  • Oladipo Oluwafolakemi Fasesin

    (Osun State Polytechnic, Osun State, Nigeria)

Abstract

Corporate survival is a source of major worry in the business world, particularly in light of unprecedented corporate failure as no investor wants their hard-earned financial fortunes wiped out in bankruptcy. This study aims to forecast the survival status of the extant Nigerian listed agricultural companies by adapting the popular Altman (1968) Z-score and Altman (1983) Z†-score models. The study was carried out on five (5) Nigerian companies in agricultural sector listed in NGX Group and worked on ex-post facto research design, in which case panel data, otherwise called longitudinal data, on the selected companies was collected from their annual reports and accounts as published in their respective websites for the period 2019 – 2023 complemented with data from NGX Group database. Furthermore, market prices of the companies’ shares were extracted from https://doclib.ngxgroup.com/DownloadsContent/. This study adopted two models credited to Prof. Edward Altman with the use of Multiple Discriminants Analysis (MDA). Data were analyzed data using statistical techniques, such as logits to determine the corporate survival probability. Data analysis was also powered by Microsoft Excel. Though there are mixed results, findings reveal that the Altman’s Z-score model is adjudged to be stronger in predicting the financial healthiness of Nigerian agriculture industry that Altman (1983) Z†-score. The study therefore recommends that the companies’ managements should scale up their activities that will ensure improved revenue through the engagement of modern technologies and the service of research consultants.

Suggested Citation

  • Olabisi Michael Oyinlola & Oladosu Jimoh Balogun & Oyetayo Oyewale Folajin & Nafisat Toyosi Muhammed & Oladipo Oluwafolakemi Fasesin, 2025. "Survival Prediction of Nigerian Listed Agriculture Companies: The Use of Altman Z-Score Models," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(14), pages 746-759, March.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-14:p:746-759
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-14/746-759.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/survival-prediction-of-nigerian-listed-agriculture-companies-the-use-of-altman-z-score-models/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bosiljka Srebro & Bojan Mavrenski & Vesna Bogojević Arsić & Snežana Knežević & Marko Milašinović & Jovan Travica, 2021. "Bankruptcy Risk Prediction in Ensuring the Sustainable Operation of Agriculture Companies," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    2. repec:osf:osfxxx:ke8ab_v1 is not listed on IDEAS
    3. Nurul Izzaty Hasanah Azhar & Norziana Lokman & Md. Mahmudul Alam & Jamaliah Said, 2021. "Factors determining Z-score and corporate failure in Malaysian companies," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 21(3), pages 370-386.
    4. 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.
    5. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
    6. Naser Abdelkarim & Khaled Zuriqi, 2020. "Corporate Governance and Earnings Management: Evidence from Listed Firms at Palestine Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(2), pages 200-217, February.
    7. Naser Abdelkarim & Khaled Zuriqi, 2020. "Corporate Governance and Earnings Management: Evidence from Listed Firms at Palestine Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(2), pages 200-217.
    8. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 4, pages 71-111.
    9. Megginson, William L. & Meles, Antonio & Sampagnaro, Gabriele & Verdoliva, Vincenzo, 2019. "Financial distress risk in initial public offerings: How much do venture capitalists matter?," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 10-30.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tijana Matejić & Snežana Knežević & Vesna Bogojević Arsić & Tijana Obradović & Stefan Milojević & Miljan Adamović & Aleksandra Mitrović & Marko Milašinović & Dragoljub Simonović & Goran Milošević & Ma, 2022. "Assessing the Impact of the COVID-19 Crisis on Hotel Industry Bankruptcy Risk through Novel Forecasting Models," Sustainability, MDPI, vol. 14(8), pages 1-44, April.
    2. Matthew Smith & Francisco Alvarez, 2022. "Predicting Firm-Level Bankruptcy in the Spanish Economy Using Extreme Gradient Boosting," Computational Economics, Springer;Society for Computational Economics, vol. 59(1), pages 263-295, January.
    3. Lohmann, Christian & Möllenhoff, Steffen, 2023. "How do bankruptcy risk estimations change in time? Empirical evidence from listed US companies," Finance Research Letters, Elsevier, vol. 58(PB).
    4. Antonio Davila & George Foster & Xiaobin He & Carlos Shimizu, 2015. "The rise and fall of startups: Creation and destruction of revenue and jobs by young companies," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 6-35, February.
    5. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    6. Li, Chunyu & Lou, Chenxin & Luo, Dan & Xing, Kai, 2021. "Chinese corporate distress prediction using LASSO: The role of earnings management," International Review of Financial Analysis, Elsevier, vol. 76(C).
    7. Sanghoon Lee & Keunho Choi & Donghee Yoo, 2020. "Predicting the Insolvency of SMEs Using Technological Feasibility Assessment Information and Data Mining Techniques," Sustainability, MDPI, vol. 12(23), pages 1-17, November.
    8. Suzan Hol, 2006. "The influence of the business cycle on bankruptcy probability," Discussion Papers 466, Statistics Norway, Research Department.
    9. Nikolaos Arnis, 2018. "Predicting Corporate Bankruptcy: A Cross-Sectoral Empirical Study - The Case of Greece," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 11(3), pages 31-56, December.
    10. Pavol Durana & Lucia Michalkova & Andrej Privara & Josef Marousek & Milos Tumpach, 2021. "Does the life cycle affect earnings management and bankruptcy?," Oeconomia Copernicana, Institute of Economic Research, vol. 12(2), pages 425-461, June.
    11. Jagjeevan Kanoujiya & Shailesh Rastogi, 2024. "Nexus between efficiency and financial distress of listed firms in India: a comparative study using frontier techniques," OPSEARCH, Springer;Operational Research Society of India, vol. 61(2), pages 835-866, June.
    12. Ralph W. Adler, 1996. "Exploring the Seeds of Organisational Decline," Australian Accounting Review, CPA Australia, vol. 6(12), pages 24-36, September.
    13. Simon Cornée, 2014. "Soft Information and Default Prediction in Cooperative and Social Banks," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 3(1), pages 89-103, June.
    14. Xavier Brédart & Eric Séverin & David Veganzones, 2021. "Human resources and corporate failure prediction modeling: Evidence from Belgium," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 40(7), pages 1325-1341, November.
    15. Zhou, Fanyin & Fu, Lijun & Li, Zhiyong & Xu, Jiawei, 2022. "The recurrence of financial distress: A survival analysis," International Journal of Forecasting, Elsevier, vol. 38(3), pages 1100-1115.
    16. Modina, Michele & Pietrovito, Filomena & Gallucci, Carmen & Formisano, Vincenzo, 2023. "Predicting SMEs’ default risk: Evidence from bank-firm relationship data," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 254-268.
    17. Bukvić, Rajko & Pavlović, Radica, 2018. "Динамички Коефицијенти: Нови Приступ У Анализи Солвентности Предузећа [The Dynamic Coefficients: New Approach to the Analysis of Company’s Solvency]," MPRA Paper 94757, University Library of Munich, Germany.
    18. Dimitras, A. I. & Slowinski, R. & Susmaga, R. & Zopounidis, C., 1999. "Business failure prediction using rough sets," European Journal of Operational Research, Elsevier, vol. 114(2), pages 263-280, April.
    19. Liang, Deron & Lu, Chia-Chi & Tsai, Chih-Fong & Shih, Guan-An, 2016. "Financial ratios and corporate governance indicators in bankruptcy prediction: A comprehensive study," European Journal of Operational Research, Elsevier, vol. 252(2), pages 561-572.
    20. Denis Fougère & Golfier, C. & Guillaume Horny & Elisabeth Kremp, 2013. "What has been the impact of the 2008 crisis on firms default? (in French)," Working papers 463, Banque de France.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:issue-14:p:746-759. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.