Analysis of financial solvency using the Z-score model of companies in the ceramic center of Cuenca
DOI:
https://doi.org/10.61347/psa.v3i1.77Keywords:
Company, financial indicators, financial statements, Z-score modelAbstract
The assessment of a company's financial health is essential for preventing economic crises and ensuring long-term sustainability. This study aims to apply Altman's Z-Score model to predict the probability of insolvency in companies belonging to the Centro Cerámico in Cuenca, Ecuador. Financial data from the accounting statements of 11 companies in the sector were analyzed using the Z-Score model as a predictive analysis tool. The results reveal that most companies maintain adequate liquidity levels and a solid financial position, indicating a low probability of bankruptcy in the short term. However, approximately 18–27% of the companies are in moderate or high-risk zones, particularly in 2020, due to factors such as reduced liquidity, low reinvestment of earnings, and underutilization of assets. It was observed that service-oriented companies tend to exhibit better financial indicators than manufacturing ones, reflecting greater stability in their operations. The study concludes that the use of the Z-Score model is an effective tool for promptly detecting these conditions, thereby facilitating the implementation of preventive measures to ensure the sector’s sustainability in a challenging economic environment.
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Copyright (c) 2025 Mariana Isabel Puente Riofrío, Eduardo Ramiro Dávalos Mayorga, Karla Lizbet Bardoscia León, Lisbeth Matilde Cáceres Vargas
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