Abstract
This study applied Altman Z-score model to assess the bankruptcy risk of a set of multidisciplinary enterprises of various types, mainly small and medium enterprises, with data taken from official financial reports of 180 enterprises in Soc Trang province. The binary logistic regression was employed to assess the impact of non-financial and financial factors on the bankruptcy risk of enterprises. The research findings showed that both the non-financial factors such as business area, types and size of the business, the educational level of managers and executors and other characteristics, and the financial factors (indicators) such as earnings before tax, net profit/equity ratio, earnings before interest and tax/total assets ratio, equity/total debt ratio, affect the bankruptcy risk of enterprises. Predicting the bankruptcy risk and measuring its determinants play an important role not only as an effective managing tool of the business, but also as evidence for policymakers to support the sustainable development of business.
Highlights
Vietnam’s economy is increasingly integrated and closely related to the regional and global economy once engaging in new generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the European Union Vietnam Free Trade Agreement
In order to clarify the differences in bankruptcy risk between types of enterprises, the study continued to conduct ANOVA analysis, and the results showed that there were statistically significant differences between limited liability companies with two or more members and private enterprises between the joint-stock and private enterprises
In the data set of this study, The research showed that regarding the characteris- enterprises operating in the manufacturing sector tics of the executive, the higher educational level of were mainly processing and aquaculture enterpristhe executive, the lower the bankruptcy risk of the es
Summary
Vietnam’s economy is increasingly integrated and closely related to the regional and global economy once engaging in new generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the European Union Vietnam Free Trade Agreement. It was worth noticing that though the rate slightly increased from 8.2% in 2017, it was the third highest since the Provincial Competitiveness Index (PCI) survey was introduced in 2005 This even became an alarming issue for local governments in its great efforts to achieve the target of 1 million operational businesses by 2020 set by the Government’s Resolution number 35 in 2016 (VCCI and USAD, 2018). After over fifty years from introducing the initial version of Z-score bankruptcy models, this model has become the most well-known method to provide an early warning sign of financial hardship in many studies of scholars and practitioners around the world (Altman, 2018). In this study the authors used the Z-score ( Z ′′) index to assess the bankruptcy risk of multidisciplinary enterprises and by types of business. The research findings were expected to identify the determinants of bankruptcy risk, to serve the decision-making of the enterprises and to suggest an evidence base for governmental agencies to introduce business support policies
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
