Maharatna PSUs and Financial Soundness - An Application of Altman's Z Score Model

摘要

Maharatna companies are top most PSUs contributing greatly to the development of our nation. These companies have existed for a long time and became self-sustained without depending on government for funds. In recent past some of the companies have started reporting losses continuously and are on the verge of bankruptcy. The government has been infusing funds to safeguard them, but is not able to improve their performance to the desired level. This paper attempts to study the reasons for the current situation of these companies by applying the famous Altman Z-Score model to verify whether these companies really suffer financially. The sample for the study comprises of Maharatna companies, and the results reveal that not all the Maharatna companies are performing as expected.