1. Estimating Financial Distress in Textile Sector: Implication of Z-Score.
- Author
-
Singh, Pooja and Chakraborty, Anindita
- Subjects
FINANCIAL crises ,INDUSTRIAL costs ,MARKET value ,TEXTILE industry ,COVID-19 pandemic ,ENTERPRISE value - Abstract
The Indian textile industry has experienced a downswing in exports, an upsurge in production costs, and low efficiency because of demonetization and Goods and Service Tax (GST) headwinds. The Covid-19 pandemic has further aggravated the situation. Though the government has taken various steps to support the sector, evaluating the financial position of a textile firm is still important as it depicts the true picture of the firm's financial status, i.e., distressed or not distressed. The sample consists of textile firms listed on the National Stock Exchange (NSE) during 2010-2020. This study predicts the financial situation of textile firms using the Altman Z-score and also the relationship between the Altman Z-score and the market value of firms in India's textile sector using panel regression model. The findings suggest that many of the firms are distressed and the Z-score significantly impacts their market value. Further, only retained earnings to the total assets is significantly associated with the market value of firms. [ABSTRACT FROM AUTHOR]
- Published
- 2022