A Study on Bankruptcy Level of Software Companies in India
Journal Title: PARIPEX-Indian Journal of Research - Year 2015, Vol 4, Issue 10
Abstract
There are several issues that are utmost relevance with factors that affect the firm’s financial distress such as high leverage, cash shortage and risk management. Given that, in many cases, financial distress may lead to firm’s insolvency. Financial distress can be defined as a circumstance where a company cannot meet nor has difficulty in paying off its current financial obligations. Therefore, since it is difficult to them to predict financial distress, this paper provides a moderate attempt to understand the feasibility of using financial ratios, capital structure and Altman Z-score as an empirical approach to predict financial distress in future. The stakeholder theory of capital structure proposed by Titman (1984) argues that firms will take into account the nonfinancial stakeholders’ preferences when making capital structure decisions. In particular, firms selling specialized products will choose a lower leverage ratio. The study found that according to Altman Z score for top ten software companies in India for the year 2005 – 2014 are 2.827 that denotes that the companies risk is in low range. The companies are out of crisis zone and financially sound. There were no signs of the companies going bankrupt.
Authors and Affiliations
DR. KAVITHA SHANMUGAM, J. TAMILSELVI
Keywords
Related Articles
- EP ID EP574099
- DOI -
- Views 112
- Downloads 0
PRESCRIBING PATTERN OF DRUGS USED IN VARIOUS HEPATIC DISORDERS
Liver disorders constitute about 10 % of all diseases. Since the diagnosis of liver disorders is so difficult, identification of its demographics is of great importance in present health scenario to understand more about...
ENVIRONMENTAL IMPACTS OF CHANGE IN SUPPLY WATER QUALITY ON DISTRIBUTION OF POTABLE WATER: A TECHNICAL REVIEW
BACKGROUND: Driven by the development of water purification technologies and water quality regulations, the use of better source water and/or upgraded water treatment processes to improve drinking water quality have beco...
Effect of Eight Weeks Jalandhar Bandh Practice on Physiological Variables of College Youths.
Jalandhar bandha is one of the three important Bandhas which are essentially required to be performed during Kumbhaka in Pranayama. Excessive pressure is developed in the lungs during Kumbhaka which elevates the blood pr...
WOMEN EXCELLENCE IN INDIAN TEXTILE INDUSTRY
India is in a blooming economic power in today’s global market. Entrepreneurial development is one the major factor for the socio-economic development. Among different industries developed, the Indian textile industry an...
INFRASTRUCTURE AND UTILIZATION PATTERN OF LIBRARY RESOURCES BY FACULTY MEMBERS AND RESEARCH SCHOLARS IN MANAGEMENT INSTITUTIONS AFFILIATED TO BHARATHIAR UNIVERSITY, COIMBATORE.
The present study has made an in depth analysis of the various aspects intended in a user study. The status of the library resources and services and their utilization by the faculty and research scholars of 28Management...