Publication Type

Journal Article

Version

Publisher’s Version

Publication Date

5-2016

Abstract

The People’s Republic of China (China) and India are two leading economies in Asia Pacific. This study examines the relationship between the financial health, as measured by the Altman Z-Score, and corporate performance, as measured by the Return on Equity (ROE), of listed manufacturing companies in these two markets. A linear regression was conducted between these variables to determine the magnitude and direction of their relationships. The trends of Z-Scores over a fourteen-year period are also analysed. The analysis covers the period from 2000 to 2013 (inclusive) and yielded a statistically positive correlation between ROE and the Z-Score for both markets. China and India both registered moderate-to-strong mean and median Z-Scores. However, China is comparatively healthier. These findings further support the economic stature of these two markets as Asian giants.

Keywords

Financial Health, Corporate Performance, Manufacturing, Altman Z-Score, Return on Equity, China, India

Discipline

Accounting | Asian Studies | Corporate Finance

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Journal of Asian Development

Volume

2

Issue

1

First Page

18

Last Page

29

ISSN

2377-9594

Identifier

10.5296/jad.v2i1.9414

Publisher

Macrothink Institute

Additional URL

https://doi.org/10.5296/jad.v2i1.9414

Download

Share

COinS