期刊名称：Academy of Accounting and Financial Studies Journal
印刷版ISSN：1096-3685
出版年度：2021
卷号：25
期号：1
页码：1-11
语种：English
出版社：The DreamCatchers Group, LLC
摘要：Financial analysis helps companies identify their financial strengths and evaluate their performance, which benefits decision-making within the organization. This document analyzes the financial situation and identifies the probability of failure of the wholesale and retail trade companies in the province of Azuay, Ecuador based on the Altman Z-Score method. For this purpose, a database has been built by taking the financial information published in the Superintendency of Companies, Securities, and Insurance of Ecuador. The results show a liquidity index of 1.80, which means that the companies have enough assets to meet their short-term obligations. The solvency ratio, 66.5%, indicates that companies are financially dependent on third parties. In the management indicator, a value of 1.99 was obtained, which indicates that companies use their assets efficiently; and, finally, the profitability indicator of 5% refers to the profits obtained after good financial management. By applying the Altman Z-Score, it was found that the companies that are in the so-called safe zone, with a score higher than 2.90, are those dedicated to fuel distribution (5.86), the machinery sector (3,98), food sector (3.90), hospital devices (3.12) and construction sector (2.93). In the meantime, the sectors that are in the ignorance zone, due to their low liquidity and indebtedness indexes, are: the agricultural sector (2.4), the clothing sector (2.44) and the household appliances sector (1.98); these sectors should improve their financial soundness. According to the present analysis, now there are 8% of companies that are in the gray zone, that is, with a score lower than 1.30, which indicates that these companies have financial problems with a possibility of future bankruptcy. Finally, the average Altman Z score is 3.28, this result reflects that none of the wholesale and retail companies are in a possible bankruptcy because they have sufficient liquidity to meet their obligations in the short term (2.31). Companies use their assets efficiently to achieve projected sales (1.99); they also meet their long-term debts (66.5%) and maintain a moderate profitability (5%).
