Bankruptcy Predictions of Ocl India Ltd. Applying Altman & Springate Models

Abstract

The study has attempted to predict the bankruptcy of OCL India Ltd. for the period 2012-13 to 2016-17 by applying Altman (1968) & Springate (1978) models. Reviewing literature it has framed four hypotheses which have been tested applying statistical tools along with the bankruptcy prediction models. Z scores and inferential statistics have supported likely to reject three null hypotheses and it has concluded there had no tendency for immediate bankruptcy under Springate model while Altman model has pointed out that the firm had been in distressed zone for the financial years 2012-13 & 2016-17 and in between these for three consecutive years had been lying in the grey area. Altman model has been identified more powerful in bankruptcy predictions than Springate model; limitations have acknowledged, practical implications and future research directions have also been indicated.

Keywords: Bankruptcy, Altman Z Scores, Springate Z Scores, Inferential Statistics