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Assessing the State of Financial Distress in Listed Companies in Ghana: Signs, Sources, Detection and Elimination – A Test of Altman’s Z-Score

This article discusses the corporate financial distress in the light of its meaning, signs, sources, detection and methods of elimination. The article applies Altman’s Z-Score to the financial statements of ten companies listed on the Ghana Stock Exchange (GSE) to determine the level of their financial soundness. The data used in the study were drawn from the website of ARG covering the period 2007 to 2013. The study finds six companies being financially sound and not in danger of financial distress, two companies in financial distress and two others in state of deterioration and likely candidates for financial distress. It is however worth noting that the two companies found to be in financial distress have not filed for bankruptcy in the period of the study. Keywords: Altman’s Z-Score, Bankruptcy, Financial Distress, listed companies