Predictive Ability of Altman Z-score of European Private Companies

The paper investigates the relationship between financial distress of European private companies identified by Altman Z-score and real bankruptcy. We extend traditional with asymmetric effect economic activity. Our results show higher forecasting performance large in a three-year projection. argue that our differ from (1968) because specific market conditions Europe enable prolongation activity after is identified. also emphasize role liquidity, size, indebtedness increasing performance. Finally, we prediction model selected indicators quality development institutional environment.