Housing Development Finance Corporation Ltd.

Banking Management
ALTMAN Z-SCORE - Altman’s Z-Score model is a numerical measurement that is used to predict the chances of a
business going bankrupt in the next two years. The model was developed by American finance professor
EdwardAltman in 1968 as a measure of the financial stability of companies

Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5

X1 = working capital/total assets (%)
X2 = retained earnings/total assets (%)
X3 = EBIT/total assets (%)
X4 = market value of equity/book value of debt (%)
X5 = sales/total assets (times)

CALCULATIONS:
X1

YEAR CURRENT ASSESTS CURRENT LIABILITIES

WORKING CAPITAL TOTAL ASSESTS WC/TA
2020 16,781.00 10,068.60 6712.4 34,663.70 0.193643494
2021 17,343.90 9,595.50 7748.4 36,035.20 0.215023089
2022 16,965.00 6,636.40 10328.6 35,004.80 0.295062391
2023 20,020.20 5,961.30 14058.9 33,374.70 0.421244236
2024 18,043.10 5,713.80 12329.3 30,322.00 0.406612361

X2

YEAR RETAINED EARNINGS

TOTAL ASSETSRE/TA
2020 22,682.10 34,663.70 0.654347343
2021 24,334.20 36,035.20 0.675289717
2022 25,359.70 35,004.80 0.724463502
2023 24,526.60 33,374.70 0.734886006
2024 21,377.60 30,322.00 0.705019458

X3

YEAR OPERATING Depreciation EBIT(OP+DEP) TOTAL ASSETS EBIT/TA

PROFIT and
Amortisatio
n Expenses

2020 42,099.30 814.9 42914.2 34,663.70 1.238015561

2021 42,657.30 812.9 43470.2 36,035.20 1.206326037
2022 34,726.10 659.9 35386 35,004.80 1.010889935
2023 29,640.90 662.3 30303.2 33,374.70 0.90796921
2024 29,225.40 667.4 29892.8 30,322.00 0.985845261

X4

0UTSTANDING SHARE MKT of TOTAL TOTAL BOOK VALUE BV OF MKT OF EQ/BV

YEAR SHARES PRICE EQUITY ASSETS LIABILITIES BOOK EQUITY OF DEBT DEBT IN CR. OF DB
2020 2,02,22,023 973.2 19680072783.60 34,663.70 10,068.60 24595.1 10068.6 100686000000.00 0.195459873
2021 2,02,12,022 1790.55 36190635992.10 36,035.20 9,595.50 26439.7 9595.5 95955000000.00 0.377162587
2022 2,02,02,021 1016.4 20533334144.40 35,004.80 6,636.40 28368.4 6636.4 66364000000.00 0.30940471
2023 2,01,92,020 1272.65 25697374253.00 33,374.70 5,961.30 27413.4 5961.3 59613000000.00 0.431069972
2024 2,01,82,019 1371.45 27678629957.55 30,322.00 5,713.80 24608.2 5713.8 57138000000.00 0.4844172

X5

TOTAL
YEAR TOTAL SALES ASSETS TS/TA
2020 36,868 34,663.70 1.063591019
2021 37,855 36,035.20 1.050500622
2022 44,646 35,004.80 1.275425085
2023 53,290 33,374.70 1.596718472
2024 51,996 30,322.00 1.714794539

ALTMAN Z SCORE

ALTMAN
YEAR X1*1.2 X2*1.4 X3*3.3 X4*0.6 X5*1.0 Z SCORE
2020 0.232372193 0.91608628 4.085451351 0.117275924 1.063591019 6.414776768
2021 0.258027706 0.9454056 3.980875921 0.226297552 1.050500622 6.461107405
2022 0.35407487 1.0142489 3.335936786 0.185642826 1.275425085 6.165328469
2023 0.505493083 1.02884041 2.996298394 0.258641983 1.596718472 6.385992342
2024 0.487934833 0.98702724 3.253289361 0.29065032 1.714794539 6.733696293

DECISION RULE: YEAR Z SCORE DECISION

2020 6.414776768 Firm is financially

sound

If Z>2.99,Firm is 2021 6.461107405 Firm is financially

Financially sound
sound.
If Z<1.81,Firm is 2022 6.165328469 Firm is financially
Financially sound
Distressed or
2023 6.385992342 Firm is financially
sound

2024 6.733696293 Firm is financially

sound