Altman's Z-Score Bankruptcy Model for Coconut Oil Mills in Western Tamil Nadu

Altman's (1968) Z-score model was used to predict the bankruptcy position of coconut oil mills in Western Tamil Nadu. The study sample consisted of 40 coconut oil mills in Western Tamil Nadu and the data collected for five-year period from 2009–10 to 2013–14. The study analyzed the coconut oil mill's financial statements with an objective to assess the bankruptcy position to determine the financial stability. The Z score “cut-off” values are greater than 3.00 for “non-bankrupt”, below 1.81 for bankrupt and area between 1.81 and 2.99 for “grey area”. The Z-score results showed that financial health of the coconut oil mills in the efficient category was too healthy and financially stable and were in “too healthy zone” or in “Safe Zone” and will not fail. However, coconut oil mills in inefficient category was in “Gray” zone or “Healthy Zone” and they may have a chance to fail or may not fail.