文章基本信息

标题：Post COVID-19 Financial Distress: Prediction of Corporate Defaults at Pakistan Stock Exchange (PSX)
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作者：Khalid Mumtaz Khan ; Naeem Ullah
期刊名称：Liberal Arts and Social Sciences International Journal
电子版ISSN：2664-8148
出版年度：2021
卷号：5
期号：1
DOI：10.47264/idea.lassij/5.1.25
语种：English
出版社：IDEA PUBLISHERS
摘要：COVID-19 has slowed down the global economic activity which is expected to turn into an economic recession, where firms are expected to experience financial distress leading to corporate defaults. Predicting such defaults is important to safeguard stakeholders’ interest in financial markets. This study has estimated extent of financial distress among firms listed at PSX and constituting KSE 30 index, by using Altman’s Z-Score. The score has been computed using financial statements of 2019-20, and on proforma financial statements for 2020-21 2019-20, considering these financial years as pre and post COVID-19 closing dates respectively for financial statements. The proforma financial statements have been drawn for financial 2020-21 2019-20 using established accounting conventions of prudence, conservatism, substance over form, ad foreseeable future. The results of Z-score in pre and post COVID-19 have been compared to assess the change in degree of financial distress among the selected firms. A significant increase in the degree of financial distress has been observed, which may lead to an increased number corporate default for the firms listed at PSX. Suggestion have been made to the firms and corporate regulators to curtail the rate of corporate defaults, along with limitation of this study and areas of future research.