An Investigation of the Altman Z-Score Measure and Return on Equity (ROE) of Firms in the Airline Industry

Authors

  • Thomas Willey Grand Valley State University
  • Susan Edwards Grand Valley State University
  • Yatin Bhagwat Grand Valley State University

DOI:

https://doi.org/10.14738/abr.1112.16059

Keywords:

Altman Z-Score, Corporate Performance, Return on Equity, Airlines, Financial Distress Prediction

Abstract

This research measures the relationship between the Altman Z-Score, a measure of a firm’s financial health, and the Return on Equity (ROE), a measure of a firm’s profitability for a sample of airline companies.  The period of the study covers 2014 to 2022 and uses linear regression to examine the relationship between ROE (dependent variable) and the Z-Score (independent variable).  Our data set contains sixty-five (65) airline firms traded on twenty-eight (28) stock exchanges.  Our initial hypothesis is that a positive and statistically significant relationship exists between the two variables over the examined period.  Further research will look at the relationship in other sectors of the markets.

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Published

2023-12-17

How to Cite

Willey, T., Edwards, S., & Bhagwat, Y. (2023). An Investigation of the Altman Z-Score Measure and Return on Equity (ROE) of Firms in the Airline Industry. Archives of Business Research, 11(12), 96–102. https://doi.org/10.14738/abr.1112.16059