摘要：Several indicators and univariate ratios can be used to measure the soundness of firms as reflected in their balance sheets (leverage, profitability, liquidity ratio, etc.). However, each indicator alone cannot measure a firm's overall financial risk or financial distress level. In this study, we measure the financial strength of the real sector firms listed on the Borsa Istanbul (BIST) by producing a composite index score that combines several different corporate finance ratios. In the first section, we conduct a multiple discriminant analysis of the variables used in Altman's z-score (1968), which is the most prevalent composite index used to measure firms' financial risk in the literature. In the second section, we introduce a new index, called the multivariate firm assessment (MFA) score, which uses the ratios that best explain the characteristics of companies listed on the BIST. The Tailored version of the Altman z-score and our new index have predictive power of around 90 percent. Furthermore, the MFA score reflects the impact of macroeconomic developments on firms' balance sheets and thus serves as an early warning of financial distress for Turkish firms. Our analyses using the MFA score suggest that non-exporting firms and firms with an open foreign exchange position have weaker balance sheets.
