Bankruptcy Prediction for Non-Financial Firms of Pakistan

International Journal of Accounting and Financial Reporting, 2015, Vol. 5, No. 2

12 Pages Posted: 16 Dec 2019

See all articles by Muhammad Sohaib Roomi

Muhammad Sohaib Roomi

National Textile University

Waqas Ahmad

National Textile University

Muhammad Ramzan

National Textile University

Dr. Muhammad Zia ur Rehman

National Textile University, Faisalabad; International Islamic University, Islamabad

Date Written: 2015

Abstract

In this study we use two models for the measuring of financial status of the non-financial firms which are listed in the Karachi Stock Exchange. The Non-financial companies represent the biggest slice at the Karachi Stock Exchange. The non-financial companies of Pakistan are the total population and sample size is 25 higher and 25 lower capital companies. The technique which used in this study was Convenience sampling technique and all 50 non-financial listed companies at KSE were included to gain deeper insights into this study. The State Bank of Pakistan shows balance sheet analyses of companies, for compiling of data financial reports were used for the years 2007 to 2012. The results of the study showed that Abbas model and Altman‟s Z-Score model was a effective tool for checking the financial health of non-financial companies listed at Karachi stock exchange. This study further explores that lower capital firm have more financially distressed companies as compare to high capital non-financial companies listed at KSE.

Keywords: KSE 100, Z-Score, bankruptcy, financial ratios, discriminant analysis

JEL Classification: G33

Suggested Citation

Roomi, Muhammad Sohaib and Ahmad, Waqas and Ramzan, Muhammad and Zia ur Rehman, Muhammad, Bankruptcy Prediction for Non-Financial Firms of Pakistan (2015). International Journal of Accounting and Financial Reporting, 2015, Vol. 5, No. 2. Available at SSRN: https://ssrn.com/abstract=3492624

Muhammad Sohaib Roomi

National Textile University ( email )

National Textile University
Faisalabad, Punjab 38000
Pakistan

Waqas Ahmad

National Textile University ( email )

National Textile University
Faisalabad, Punjab 38000
Pakistan

Muhammad Ramzan

National Textile University ( email )

National Textile University
Faisalabad, Punjab 38000
Pakistan

Muhammad Zia ur Rehman (Contact Author)

National Textile University, Faisalabad ( email )

Sheikhupura Road, Faisalabad
Faisalabad, Punjab 38000
Pakistan

International Islamic University, Islamabad ( email )

Islamabad, 44000
Pakistan

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