Financial Failure Risk Estimation in BIST Automotive Sector: Altman Z’’ and Springate Models
Chapter from the book:
Uygurtürk,
H.
(ed.)
2025.
Empirical Studies in Finance.
Synopsis
Businesses face a number of problems while continuing their activities. One of the most prominent of these problems is their inability to fulfill their financial obligations. Financial failure can occur as a result of factors originating from both the internal conditions of the business, the environment in which they operate, and macroeconomic factors. Businesses experiencing financial failure face processes that lead to the termination of their activities. Therefore, businesses should conduct financial failure risk analysis in a timely manner and take precautions as a result of the findings obtained. Early precautions can prevent the failure of the business. This study aims to measure the financial failure risk of automotive sector businesses traded on Borsa Istanbul. Altman and Springate models were used in the study. The study includes 8 businesses. As a result of the findings of the study covering the period 2020-2024, it was concluded that the findings obtained from the Altman Z’’ and Springate models partially overlap. While 4 financially successful businesses were identified in both models, 1 business was in the financial distress zone in both models.
