International Journal of Multidisciplinary Research and Development

International Journal of Multidisciplinary Research and Development


International Journal of Multidisciplinary Research and Development
International Journal of Multidisciplinary Research and Development
Vol. 3, Issue 12 (2016)

Evaluating financial health of selected steel companies in India through ‘Z’ score model


Dr. Chetana R Marvadi

Measuring the financial health of a firm has been an extremely important need for both managers as well as investors. Several tools were developed to diagnose the financial strength of a Company based on the Financial Statements. Ratio Analysis, and Decision Theory etc., but they indicate the present result not the future. Edward I. Altmans discriminant analysis, which employs a combination of various ratios to form an index of liquidity, profitability, sustainability and feasibility, has been highly accurate in analyzing the present state of financial health of a firm as well as to enable one to predict the future, particularly in terms of probability of bankruptcy. This paper attempts to investigate the financial health of selected Steel companies in India with special reference to Tata Steel Ltd., JSW Steel Ltd., Jindal Steel Ltd., and SAIL. The period of study is 7 years from 2008-09 to 2014-15. As per the calculated Z-Score, the financial position of SAIL, Tata Steel Ltd., and JSW Steel Ltd. Were found to be satisfactory. Jindal Steel Ltd. needs to put in effort to increase the score. The study concludes that the selected steel companies overall financial health was satisfactory during the study period.
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