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Validity of Altman Z-Score Model to Predict Financial Failure: Evidence From Jordan

Author

Listed:
  • Sufian Al-Manaseer
  • Suleiman Al-Oshaibat

Abstract

This paper aims to investigate the Validity of Altman z-score model to predict financial failure in insurance companies listed on Amman Stock Exchange (ASE) over the period 2011-2016. To achieve the goal of the study, the study depended on the different statistics analytical method and Multiple Linear Regression through doing the statistical analysis of the independent variables on the dependent variable related to the subject of the study through the (E-views) program in order to cover the analytical part of the study, in addition to the descriptive method through relying on books, periodicals, previous studies and financial reports of the insurance companies of the study¡¯ sample, whether the direct or the indirect ones, to cover the theoretical part. The result of the study finds a high predictive power for Z-score model. Moreover, the findings reveal that Z-Score model could be valuable instrumental indicators for many users of financial statement such as financial managers, auditors, lenders, investors, to make right decisions in the face of financial failure.

Suggested Citation

  • Sufian Al-Manaseer & Suleiman Al-Oshaibat, 2018. "Validity of Altman Z-Score Model to Predict Financial Failure: Evidence From Jordan," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(8), pages 181-181, August.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:8:p:181
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    References listed on IDEAS

    as
    1. Pathan, Shams, 2009. "Strong boards, CEO power and bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1340-1350, July.
    2. Ijaz, Muhammad Shahzad & Hunjra, Ahmed Imran & Hameed, Zahid & Maqbool, Adnan & Azam, Rauf i, 2013. "Assessing the Financial Failure Using Z-Score and Current Ratio: A Case of Sugar Sector Listed Companies of Karachi Stock Exchange," MPRA Paper 60787, University Library of Munich, Germany.
    3. Oecd, 2002. "Access for Business," OECD Digital Economy Papers 67, OECD Publishing.
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    Cited by:

    1. Niluthpaul Sarker & S. M. Khaled Hossain, 2023. "Ownership Structure and Financial Distress: Investigating the Moderating Effect of Audit Quality," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 187-202, November.
    2. S. M. Khaled Hossain & Niluthpaul Sarker, 2025. "Do the Risk-averse Firms Confirm Enhanced Firm Value? Exploring the Managerial Ownership’s Moderating Effect," Jindal Journal of Business Research, , vol. 14(1), pages 73-93, June.
    3. Subrata Deb Nath & Prasenjit Kumer Biswas & Md. Aminur Rashid & Munna Rani Biswas, 2020. "Financial Distress Prediction through Altman Z-Score Model: A Case Study of State Owned Commercial Banks of Bangladesh," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 11(3), pages 60-67, September.
    4. Karolis Andriuskevicius & Tomas Balezentis & Dalia Streimikiene & Olatunji Abdul Shobande, 2026. "Analysis of financial distress risk in public listed agrifood companies in Lithuania," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 14(1), pages 1-25, December.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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