Z – Altman Review The Case of Beverage Company in Latam

Abstract

In recent years, the growth in beverage industry has been important. Overall, statistics show that Latam companies have presented a good financial performance. However, this performance could be highly questionable and, questions like what is going to happen in the next years in the industry or how likely a failure or bankruptcy could be experimented and needs to be answered. So, in order to answer those questions, an analysis is done by Ivan Vonne, a senior analyst. The method applied to this assessment is the Z-Score method developed by Altman in 1968. The literature review helped us to identify three types of Z-score, one developed by Edward Altman in 1968 called "Z-Score Model", the other improved by Edward Altman in 1984 called "Company and Country Risk Models" for private companies and the last one improved by Altman, Hartzell y Peck in 1995 called "Emerging Market Scoring Model" (EMS Model) for non-manufactured companies and emerging market credits. The paper, focus in a Beverage Industry. One company has been identified with operations in Peru and this company listed its equity in the Bolsa de valores de Lima (BVL, for its acronym in Spanish). The paper has an introduction about the Z- score literature, then it has an explanation about the Beverage industry in Peru and finally, the paper include the Z-score values of the company between 2009 and 2012.