Z Score Reveals Credit Capacity: A Case Study of SBI
Published: 2011
Author(s) Name: Roli Pradhan, Dr K K Pathak, Prof.VP Singh
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Abstract
The prediction of corporate fi nancial failure, crucial for
the prevention and mitigation of economic downturns
in a national economy, requires the categorization of
healthy and unhealthy companies. This study examines
the case of SBI and applies artifi cial neural network
architectures—the self-organizing map —to assess
the corporate fi nancial health of the fi rm. The research
work fi rst estimates the internal parameters of the Z
Score for a fi rm, these parameters from 2001-2008 to
the train the BPNN and uses the estimates of the year
2009 and 2010 values for the validation process. Finally
it dwells to draw predictions for the period 2011-2015
and emphasizes the growing role of BPNN application
based Z Score computation of fi nancial Bankruptcy.
Keywords: BPNN, neural network, credit lending, Z
sore
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