Estimation of the Bankruptcy Risk of the Companies in the BIST Construction Index

Authors : Samuray Karaca, Ahmet Karaca

Pages : 205-222

Doi:10.29023/alanyaakademik.648125

View : 16 | Download : 3

Publication Date : 2020-05-31

Article Type : Research

Abstract :In this study, it is aimed to measure the effects of the recent négative developments in the Turkish Construction sector on the financial failures of the companies in Borsa Istanbul Construction Index. This study is particularly important with regard to determining whether the concordat announcements, which started especially in the 3rd quarter of 2018, carry a risk for the construction sector and ascertaining whether there have been any warnings beforehand. The financial statements of the companies in the construction sector in 2010-2018 period will be analyzed with the Altman Z score model to see if they carry bankruptcy risk. In addition, by comparing the calculated Z scores with the stock prices of stock certificates, the extent to which the probabilities of bankruptcy are priced in the stock market will also be measured. Predicting bankruptcy risk is vital for both firms and stakeholders. The findings will contribute significantly to strategy determination for firms and investors in this sector. On the other hand, the results will also guide investors' stock preferences.
Keywords : Altman Z Model, Probability of Bankruptcy, Borsa Istanbul, Construction Index