Studying the relationship between performance and Z-Scores for manufacturing firms in Singapore

• Main Authors: FOO, See Liang, PATHAK, Shaakalya
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Financial Health; Corporate Performance; Manufacturing; Altman Z-Score; Singapore; SGX; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1787; https://ink.library.smu.edu.sg/context/soa_research/article/2814/viewcontent/5566_14416_1_PB.pdf
• Institution: Singapore Management University

Singapore is a key leading economy in the Asia Pacific region. This study examines the relationship between the financial health, as measured by the Altman Z-Score, and corporate performance, as measured by the Return on Equity (ROE), of listed manufacturing companies in this market. A linear regression has been conducted between these variables to determine the magnitude and direction of their relationships. The trends of Z-Scores over a five-year period have also been analysed.The analysis covers the period from 2013 to 2017 (inclusive) and yields a statistically positive correlation between ROE and the Z-Score for the market. Singapore registered relatively moderate-to-healthy mean and median Z-Scores. These findings further support the strong economic position of this market in Asia.