Adjusting parameters contained in Altman Model Z to Peru’s economic reality
| Areas | : | Employment, productivity and innovation |
|---|---|---|
| Researcher/s in charge | : | |
| Execution time | : | October 2017 |
Presentation
The use of predictive models of firms with financial issues is useful as indirect indicators of the potential risk of tax noncompliance since companies with such issues may be encouraged to use evasion or avoidance mechanisms in order to finance themselves with taxes. One such model is Edward Altman’s Model Z undertake from some indicators drawn from the financial statements of firms whose purpose is to predict the probability of bankruptcy of firms in a medium-term horizon. However, the estimation of the parameters contained in Altman’s Model Z was undertake with data from firms of other economic realities. Therefore, statistical or econometric work is required to adjust these parameters to the productivity that firms exhibit in the market in Peru.
