Linkage between Altman Z score and other financial performances of Ashok Leyland Limited in India – Comparative Analysis

Abstract

The present study is mainly based on the secondary data and the data is collected from the annual report of selected company and websites of moneycontrol.com, BSE.com etc for the period ended on 31st March 2007 to 31st March 2019. IGR and SGR under Du Pont analysis and Altman Z score were used as modern financial variable instead of other financial variables like operating profit ratio, ROCE etc. (Suwaidan 2004), Adam Lindgreen e al (2008), Jain Neeta et al, Zhi Tang et al (2010) Md Abdur Rouf (2011) and Yaghoub Alavi Matin et al.2011). All the parameters have been analyzed with descriptive analysis, Karl Pearson’s correlation for its validity. The coefficient of determination has also been tested through linear regression analysis and result of co efficient of correlation proved that IGR, SGR and Altman Z score has significant relationship with each other at 1% levels. Dividend per share, Operating profit per share, Return on Capital employed and Inventory turnover ratio has significantly predicted SGR and Asset Turnover only significantly predicts Altman Z score of Ashok Leyland Limited for the study period.