Abstract
The performance of automobile industry can be used as anindicator to assess the economic strength of any country.This paper attempts to study the financial health of automobile industry in India. There are a number of techniques available which can be used to check the financial performance of the company and Altman’s Z score model is one of them. Altman’s Z score model is based on multiple discriminant analysis (MDA). This modelcan help the company in making good financial decisions and can also provide guidance to investors in selecting right company forthe investment. Altman’s Z score model for manufacturing firms are applied to automobile industry. It assesses the financial performance of the companies to check the present financial soundness and chances of bankruptcy in future. This paper analyzedselect automobile companies which are listed on Bombay Stock Exchange (BSE) for last five years i.e. 2010 to 2014. The findings of this study revealed that Z scoresfor all the select automobile companies were more than 2.9 during the study period except Tata Motors which according to the study had Z score between 1.8 and 2.9 during the year 2010 and 2011. Hence, at present they all are financially sound, away from bankruptcy zone and are safe to invest.
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