Abstract
This study replicates and extends the research that created the Altman z-score measure of bankruptcy. To eliminate criticisms of the original study, the replication uses a large sample, data from recent years, additional statistical methods, and eliminates the matched pair design of the original study, to rescale the z-score and identify additional models. This rescaling of the z-score greatly improves the predictive power of the measure both in the short term and over a long event window. The rese arch was exte nded by inc luding additional ratios beyond the original ratios included in the z-score. A further extension tests the ability of discretionary accruals to predict bankruptcy.
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