Evaluating Financial Stability and Fraud Detection in Selected Indian Pharmaceutical Companies Using Altman Z Score and Beneish M Score Models
Journal Title: International Journal of Social Science Humanity & Management Research - Year 2024, Vol 3, Issue 6
Abstract
This study examines the financial health and the risk of financial statement fraud among five major pharmaceutical companies—Sun Pharmaceutical Industries Ltd., Lupin Limited, Aurobindo Pharma Limited, Dr. Reddy's Laboratories, and Cipla Limited—over the period from 2019 to 2023. Financial statements are crucial documents that provide insights into a company's financial performance and position. However, they can be susceptible to manipulation, leading to financial fraud. The research utilizes the Altman Z-score to assess financial stability and the Beneish M-score to detect the likelihood of financial manipulation. Findings indicate that these companies generally exhibit strong financial health, with Altman Z-scores consistently categorizing them in the "Safe" zone, suggesting a low risk of bankruptcy. Sun Pharmaceutical Industries Ltd. showed significant financial improvement throughout the period, while Lupin Limited experienced a brief dip into the "Gray" zone in 2022 before recovering. Aurobindo Pharma Limited, Dr. Reddy's Laboratories, and Cipla Limited demonstrated remarkable stability, with Cipla Limited maintaining consistently high Z-scores. The Beneish M-score analysis indicated a low risk of earnings manipulation for most companies, though Lupin Limited showed occasional high-risk years. Overall, these results suggest that these pharmaceutical companies maintain strong financial practices and transparency, promoting investor confidence and reflecting positively on the industry's financial integrity and sustainability.
Authors and Affiliations
Dr. Poojan N. Parikh
Keywords
Related Articles
- EP ID EP739113
- DOI 10.58806/ijsshmr.2024.v3i6n30
- Views 57
- Downloads 0
Literature Review: Emotional Intelligence and Job Stress in Company Employees
Work stress is a dynamic condition in which an individual is faced with opportunities, demands, or resources related to what the individual wants and the results are seen as uncertain and important. Meanwhile, emotional...
Integrating Indian Knowledge System in Education: A Study of Government Reforms
The Indian Knowledge System (IKS), initiated in the ancient philosophy, science and culture of the country, is also recognized in today’s discourse. With the launch of the National Education Policy (NEP) 2020, the Indian...
Teachers' Welfare as Determinants of Students Learning Outcomes in Junior Secondary Schools in Delta South Senatorial District
The study examined teachers' welfare as determinants of students’ learning outcomes in Junior Secondary schools in Delta South Senatorial District. The study had a sample size of 364 participants, and the instruments emp...
The Influence of Social Media on Moral Values and Group Norms among Secondary School Students A Study of Delta State
This study examines the influence of social media on moral values and group norms among secondary school students in a study of the delta state. The paper covers the extent to which social media is used by secondary scho...
Classroom Social Dynamics and Supportive Learning Environment in Public Elementary Schools
Public elementary schools are currently dealing with variety of classroom concerns such as pupils’ academic difficulties, behavioral issues, social problems, and emotional difficulties. These can be resolved by providing...