Luận văn project name a study on application of altman's z score model in assessing the performance and the possibility of bankrupty of listed enterprises in viet nam

The bankruptcy of businesses can be predicted using many different research models However, this siudy applies the most famous model among the models, 7, scores through the application

‘VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

GRADUATION PROJECT

PROJECT NAME: A STUDY ON APPLICATION OF

ALTMAN’S Z-SCORE MODEL IN ASSESSING THE

PERFORMANCE AND THE POSSIBILITY OF BANKRUPTY

OF LISTED ENTERPRISES LN VIETNAM

STUDENT: PIIAM TIM TIANII TIIAO

Hanoi - Year 2020

‘VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

GRADUATION PROJECT

PROJECT NAME: A STUDY ON APPLICATION OF

ALTMAN’S Z-SCORE MODEL IN ASSESSING THE

PERFORMANCE AND THE POSSIBELITY OF BANKRUPTY

OF LISTED ENTERPRISES LN VIETNAM

SUPERVISOR: DR.DO PHUORG HUYEN STUDENT: PIIAM TID TILANII TIIAG

STUDENT ID: 16071111

COHORT: QH-2016-Q MAJOR: INTERNATIONAL BUSINESS

Tlanoi - Year 2020

LETTER OF DECLARATION

Thereby declare thai the Graduation Project “A STUDY ON APPLICATION:

OF ALTMAN’S Z-SCORE MODEL IN ASSESSING THE PERFORMANCE AND THE POSSLBILITY OF BANKRUPTY OF LISTED ENTERPRISES IN

VIETNAM” is the results of my own research and has never been published in any work of others During the implementation process of this project, | have seriously taken research ethics; ail findings of this project are results of my own research and

surveys; all references im this project are clearly ented according to regulalioms

I take full responsibility for the fidelity of the number and data and other

contents of my graduation project

Hanoi, 27/05/2020

Student

(Signature and Full name)

LIST OF TABLES

Table 1: Correspondence between Z’”- score and Standard & Poor Rating

Table 2: Statistics variables: X1, X2, X3,X4

Table 3: Percentage of firm—X1

Table 4: Percentage of firms- X2

Table 5: Percentage of firms- X3

Table 6: Percentage of firms- X4

Table 7: 7."'-score Results

Table 8: Asset Situation of Saigon Plastic Packaging Company 2012-2019

Table 9: Asset Investment Rate of Saigon Plastic Packaging Company 2012-2019 Table 10: Growth af Net Revenue of Saigon Plastic Packaging Company 2012-2019

Table 11: Growth of Net Profit of Saigon Plastic Packaging Company 2012-2019 Table 12: Expenses Situation of Saigan Plastic Packaging Company 2012- 2019

‘Table 13: Financial Ratios

Table 14: Working capital/ Total Assets Ratio (X1)

Table 15: Retained Earnings/ Total Assets (X2)

‘Table 16: EBII7Lotal Assets

Table 17: Book value of Equity / Total Liabilities

Table 18: 7°?- scpre = 3.2546.56"X 143,26" 246,72°X3+1.05°X4

vi

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging

‘TABLE OF NOTATIONS AND ABBREVIATLONS AY

CHAPTER 2: LITERATURE REVIEW

2.1 INTERNATIONAL LITERATURE REVIEW -

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

4.1.2 RESULTS OF RESEARCH Z- SCORE MODEL 26

4.1.3 EVALUATE THE RESEARCH RESULTS 2B

4.2 APPLICATION OF Z-SCORE MODEL FOR SAIGON PLASTIC

PACKAGING COMPANY oo cesses neeanssneeniisen 34

§.4.2 DEVELOPING A SYSTEM OF VIETNAM CREDIT RATING

ACCORDING TO INTERNATIONAL STANDARDS 31 5.4.3 COMPLETING BANKRUPTCY LAW AND RELATED

KNOWLEDGEMEXT

I would like to sincerely thank Dr Do Phuong Huyen for her support and guidance, without which this project would not be possible { would also like to thank the teachers in Intemational School for imparting their knowledges and sharing their

experiences

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

KNOWLEDGEMEXT

I would like to sincerely thank Dr Do Phuong Huyen for her support and guidance, without which this project would not be possible { would also like to thank the teachers in Intemational School for imparting their knowledges and sharing their

experiences

vii

vii

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging

4.1.2 RESULTS OF RESEARCH Z- SCORE MODEL 26

4.1.3 EVALUATE THE RESEARCH RESULTS 2B

4.2 APPLICATION OF Z-SCORE MODEL FOR SAIGON PLASTIC

PACKAGING COMPANY oo cesses neeanssneeniisen 34

§.4.2 DEVELOPING A SYSTEM OF VIETNAM CREDIT RATING

ACCORDING TO INTERNATIONAL STANDARDS 31 5.4.3 COMPLETING BANKRUPTCY LAW AND RELATED

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging

‘TABLE OF NOTATIONS AND ABBREVIATLONS AY

CHAPTER 2: LITERATURE REVIEW

2.1 INTERNATIONAL LITERATURE REVIEW -

‘TABLE OF NOTATIONS AND ABBREVIATLONS AY

CHAPTER 2: LITERATURE REVIEW

2.1 INTERNATIONAL LITERATURE REVIEW -

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

vii

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

‘TABLE OF NOTATIONS AND ABBREVIATLONS AY

CHAPTER 2: LITERATURE REVIEW

2.1 INTERNATIONAL LITERATURE REVIEW -

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

KNOWLEDGEMEXT

I would like to sincerely thank Dr Do Phuong Huyen for her support and guidance, without which this project would not be possible { would also like to thank the teachers in Intemational School for imparting their knowledges and sharing their

experiences

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging

LIST OF TABLES

Table 1: Correspondence between Z’”- score and Standard & Poor Rating

Table 2: Statistics variables: X1, X2, X3,X4

Table 3: Percentage of firm—X1

Table 4: Percentage of firms- X2

Table 5: Percentage of firms- X3

Table 6: Percentage of firms- X4

Table 7: 7."'-score Results

Table 8: Asset Situation of Saigon Plastic Packaging Company 2012-2019

Table 9: Asset Investment Rate of Saigon Plastic Packaging Company 2012-2019 Table 10: Growth af Net Revenue of Saigon Plastic Packaging Company 2012-2019

Table 11: Growth of Net Profit of Saigon Plastic Packaging Company 2012-2019 Table 12: Expenses Situation of Saigan Plastic Packaging Company 2012- 2019

‘Table 13: Financial Ratios

Table 14: Working capital/ Total Assets Ratio (X1)

Table 15: Retained Earnings/ Total Assets (X2)

‘Table 16: EBII7Lotal Assets

Table 17: Book value of Equity / Total Liabilities

Table 18: 7°?- scpre = 3.2546.56"X 143,26" 246,72°X3+1.05°X4

vi

‘TABLE OF NOTATIONS AND ABBREVIATLONS AY

CHAPTER 2: LITERATURE REVIEW

2.1 INTERNATIONAL LITERATURE REVIEW -

ABSTRACT

The business environment always contains many volatile factors affecting the

investmer financing process as well as the business performances of enterprises,

especially in the context of strong international economic integration which brings many opportunities and challenges for Vietnamese businesses Therefore, businesses always lace positive periods allemating with [he negative stages as well as Ihe stage

of success and failure in fimancial trends which always contain unpredictable

potential When a negative period shifts from temporary to structural and chronic (and thus continues over time), the company is often destined to cease This affects

creditors and other stakeholders a lot because businesses are insolvent and unable to

pay the amount they awe as originally committed

Therefore, early prediction about the bankruptey of the company are of prime

importance to the various stakeholders of the company as well as the whole society

Bankruptcy prediction is an important task The first phase of determining the

solvency can avoid evils shortly and proleel the company from bankruptcy The

bankruptcy of businesses can be predicted using many different research models

However, this siudy applies the most famous model among the models, 7, scores

through the application of the sample of manufacturing and non-manufacturing

companies of Vietnam from 2015 to 2019 to evaluate the performance of enterprises

and predicl bankruptcy arm cas ¢ about Saigon Plastic Packaging The study has found that the Z score model is appropriate and feasible to apply to analyze the performance

of Viemamese enterprises by industries, sectors, and forecast bankruptcy risk of

enterprises:

Key word: Z-score model, bankruptcy, performance

4.1.2 RESULTS OF RESEARCH Z- SCORE MODEL 26

4.1.3 EVALUATE THE RESEARCH RESULTS 2B

4.2 APPLICATION OF Z-SCORE MODEL FOR SAIGON PLASTIC

PACKAGING COMPANY oo cesses neeanssneeniisen 34

§.4.2 DEVELOPING A SYSTEM OF VIETNAM CREDIT RATING

ACCORDING TO INTERNATIONAL STANDARDS 31 5.4.3 COMPLETING BANKRUPTCY LAW AND RELATED

KNOWLEDGEMEXT

I would like to sincerely thank Dr Do Phuong Huyen for her support and guidance, without which this project would not be possible { would also like to thank the teachers in Intemational School for imparting their knowledges and sharing their

experiences

vii

LIST OF TABLES

Table 1: Correspondence between Z’”- score and Standard & Poor Rating

Table 2: Statistics variables: X1, X2, X3,X4

Table 3: Percentage of firm—X1

Table 4: Percentage of firms- X2

Table 5: Percentage of firms- X3

Table 6: Percentage of firms- X4

Table 7: 7."'-score Results

Table 8: Asset Situation of Saigon Plastic Packaging Company 2012-2019

Table 9: Asset Investment Rate of Saigon Plastic Packaging Company 2012-2019 Table 10: Growth af Net Revenue of Saigon Plastic Packaging Company 2012-2019

Table 11: Growth of Net Profit of Saigon Plastic Packaging Company 2012-2019 Table 12: Expenses Situation of Saigan Plastic Packaging Company 2012- 2019

‘Table 13: Financial Ratios

Table 14: Working capital/ Total Assets Ratio (X1)

Table 15: Retained Earnings/ Total Assets (X2)

‘Table 16: EBII7Lotal Assets

Table 17: Book value of Equity / Total Liabilities

Table 18: 7°?- scpre = 3.2546.56"X 143,26" 246,72°X3+1.05°X4

vi

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging

4.1.2 RESULTS OF RESEARCH Z- SCORE MODEL 26

4.1.3 EVALUATE THE RESEARCH RESULTS 2B

4.2 APPLICATION OF Z-SCORE MODEL FOR SAIGON PLASTIC

PACKAGING COMPANY oo cesses neeanssneeniisen 34

§.4.2 DEVELOPING A SYSTEM OF VIETNAM CREDIT RATING

ACCORDING TO INTERNATIONAL STANDARDS 31 5.4.3 COMPLETING BANKRUPTCY LAW AND RELATED

TABLE OF NOTATIONS AND ABBREVIATIONS

S&P rating Standard and Poor Rating SPP Saigon Plastic Packaging