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Journal of Statistics and Management Systems

(Since 1998)
Hybrid ·Peer-reviewed·ISSN (Online): 2169-0014·ISSN (Print): 0972-0510

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Monthly Journal: Publishes peer-reviewed aticles on theoretical and applied statistics and management systems, expoloring industrial statistics, actuarial and decision sciences.

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Journal of Statistics and Management Systems
Open Access Research Article

Evaluating financial distress: With special reference to the Navratna companies of India

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pp. 771–786Vol. 26Issue 3April 2023DOI: 10.47974/JSMS-1067XML
Published Online:
31 Mar 2023
Article type:
Research Article
Language:
EN
Article no.:
JSMS-1067
Pages:
771–786

Abstract

Public sector undertakings/enterprises are wholly or partly owned by the government of India. Navratna companies have a special place in public sector undertakings as they have been given the status based on the operational and financial criteria that includes net profit, net worth, total cost of production, total manpower cost, cost of services, capital employed and profit before depreciation, interest, and taxes. The main aim of this research paper is to study the financial distress condition of the Navratna companies. For the purpose of computation of companies’ health Altman’s Z- Score Model is used. Usually, these types of enterprises do not face such a situationas they are self- ustainable but even if they are in such a situation,the government of India immediately may grant them funds and their chances of bankruptcy are reduced or delayed. However, they need to examine their financial conditions regularly as it will enhance the companies’ sustainability and financial creditability. The present study found that there are six companies are financially distressed, three companies are in grey zone and three companies are financially healthy.

Keywords

Financial DistressNavratna CompaniesAltman’s z-scoreBankruptcySustainability

Subject Classifications

91B0591G5091G6091G8097K40

References

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