Assessing and predicting financial health of manufacturing business firms in Tanzania by using Z-score models.

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Date
2003
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
However competitive and prosperous a business may be, there is no guarantee of its perpetuity. This business uncertainty is what makes shareholders, the management, creditors, employees, regulatory authorities and governments to be very much concerned about the future viability of the business. These business uncertainties have led to the development of several techniques for classifying and predicting the financial health of business firms. These techniques, which include qualitative and quantitative ones, help to signal early warnings to interested parties about the future viability of the business firms so that they can take rational decisions. The main objective of this study was to investigate how best the financial variables in Altman's Z-Score models of 1968 could assess and predict the financial health of business firms in Tanzania. Various financial variables relevant to the study were collected from audited financial statements of five publicly and five non-publicly traded companies. The variables were then subjected to Altman's Z-Score models of 1968 to investigate the classification and prediction abilities of the models. The results obtained were impressive. The models managed to classify and predict the financial health of both publicly and non-publicly traded companies correctly. Thus the Z-Score models can assess and predict the financial health of firms. The study therefore recommends the use of Z-Score models in assessing and predicting the financial health and continuity of business firms because they are objective and reliable.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG6024.3.T34K5)
Keywords
Financial futures, Variables assessment, Business firms analysis, Z-score models, Tanzania, Tanzania
Citation
Kingu, E. W. M. K. (2003) Assessing and predicting financial health of manufacturing business firms in Tanzania by using Z-score models., Master dissertation, University of Dar es Salaam. Dar es Salaam