Bankruptcy Prediction In The Textile Industry

Abstract

This paper extends the use of Altmans Z-Score bankruptcy predictor to the textile industry. Generally, firms benefited from the North American Free Trade Agreement (NAFTA) but suffered financially after the Asian currency crisis. The study finds that Type I classification errors support prior research while Type II classification errors are much higher than previous literature findings. The results indicate a need for a modified bankruptcy predictor for the textile industry.