Predicting corporate failure: an application of Altman's Z-score and Altman's EMS models to the JSE Alternative Exchange from 2008 to 2012

The JSE Alternative Exchange (Alt-X) experienced a dramatic decline in equity values from 2008 to 2009 as part of the global economic crisis of approximately 60, and has subsequently experienced a decline of a further 50 from 2009 to 2012. By way of comparison, the JSE Main Board declined approximately 33 in 2008 and 2009, and has subsequently experienced a 100 increase in equity values from 2009 to 2012. The extent of the decline in equity values of companies listed on the Alt-X has raised the issue as to whether companies listed on the Alt-X have a higher likelihood of corporate failure. This study applies the Altman Z-Score and the Altman Z'EM score in order to identify trends in corporate solvency of Alt-X listed companies. Thereafter bond equivalent ratios are calculated for further analysis.

Grantor dc:publisher.institution

Department of Finance and Tax

Year dc:date.issued

2014

Author dc:creator

• Coelho, Myles

Advisors dc:contributor.advisor

• West, Darron
• Correia, Carlos

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/8561

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/8561