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Evaluation of the Financial Distress Level of Construction Companies in Malaysia Using Z-score Model

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Proceedings of the 8th International Conference on Computational Science and Technology

Part of the book series: Lecture Notes in Electrical Engineering ((LNEE,volume 835))

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Abstract

The companies’ financial distress is a popular issue nowadays due to the impact of the Covid-19 pandemic recently. The Covid-19 pandemic has been greatly deteriorated and jeopardized the financial health of the companies from all sectors, including the construction sector. The analysis on the financial performance of the companies is a good indicator to determine the financial distress level of the companies. This study aims to measure the financial health of listed construction companies in Malaysia with Altman Z-score model. Altman Z-score model comprises five important and significant financial ratios that are utilized to analyze the financial distress level of the companies. The power of the Z-score model is able to categorize the financial performance of the companies into three zones, namely safe zone, grey zone or distress zone. This study is significant because it helps to identify the financial distress level of the company. Hence, the companies can take remedial actions in order to improve themselves in terms of financial health.

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Author information

Authors and Affiliations

  1. Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia

    Liew Kah Fai, Lam Weng Siew & Lam Weng Hoe

Authors
  1. Liew Kah Fai
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  2. Lam Weng Siew
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  3. Lam Weng Hoe
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Corresponding author

Correspondence to Lam Weng Siew .

Editor information

Editors and Affiliations

  1. Faculty of Computing and Informatics, Universiti Malaysia Sabah, Kota Kinabalu, Malaysia

    Rayner Alfred

  2. School of Information, Science, Security, Network, Japan Advanced Institute of Science and Technology, Ishikawa, Japan

    Yuto Lim

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Fai, L.K., Siew, L.W., Hoe, L.W. (2022). Evaluation of the Financial Distress Level of Construction Companies in Malaysia Using Z-score Model. In: Alfred, R., Lim, Y. (eds) Proceedings of the 8th International Conference on Computational Science and Technology. Lecture Notes in Electrical Engineering, vol 835. Springer, Singapore. https://doi.org/10.1007/978-981-16-8515-6_9

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