Investigate the Ability of Bankruptcy Prediction Models of Altman and Springate and Zmijewski and Grover in Tehran Stock Exchange

Abolfazl Aminian, Hedayat Mousazade, Omid Imani Khoshkho

Abstract


The recent bankruptcies of large companies at the international level and fluctuations in the Iran stock exchange shows that the need for tools to assess the financial ability of companies.One of these tools is using the bankruptcy prediction models. Due to this necessity, the main purpose of this study was to determine the amount of model'sefficiency of Altman, Springate, Zmijewski and Grover in predicting bankruptcy situation of listed companies in the Tehran Stock Exchange and compares the results of the models; in order to fulfill this goal has been developed eight hypotheses.The statistical population and the sample size of this study are to include 35 companies from textile and ceramic and tilecompanies listed on the Tehran Stock Exchange during the period 2008 to 2013.In this study, after determining the normal distribution of data by using of correlation tests, any of the study hypotheses are being tested and to respond to research hypotheses, we used regression analysis.Also, by using correlation analysis to examine the significance of each of the models of Altman, Springate, Zmijewski and Grover and to find the model was used by the method of multiple linear regressions for panel data.Finally, after the test, all the hypotheses were confirmed and the results showed that "in the five years of the study to predict the company’s bankruptcy, respectively the model of Grover, Altman, Springate and Zmijewski have the better ability to predict financial crises.

DOI: 10.5901/mjss.2016.v7n4S1p208


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Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)

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