A study of financial helth of oil and gas industry in India

The Indian industry was exposed to large scale domestic and international competition following her economic liberation in 1992. While few firms are able to take up the challenge, a large number of firms are affected by the competition. The level of nonperforming assets of Indian companies has increased several times during this period. The detection of companies operating and financial difficulties is the subject which has been particularly amenable to analysis with financial ratios. I have used Altman‘s Z-score to predict, analyze and compare the financial health of the companies. The Z-Score formula for predicting bankruptcy of Edward Altman is a multivariate formula for a measurement of the financial health of a company and a powerful tool to diagnose the probability that a company will go bankrupt within a 2 year period. Studies measuring the effectiveness of the Z-Score have shown the model is often accurate in predicting0bankruptcy0(72%-80%0reliability). Altman's Z score is plays an important role to tack decision of financial condition of the companies.