ADMINISTRATIVE PHILOSOPHY

Abstract

In recent years, high interest rates and inflation have led to an increase in corporate bankruptcies. In 1980, there were a record 45,841 bankruptcies of American companies, which also represented a 55% increase over 1979. In this environment, it is imperative for management to frequently inspect the condition of their companies and the financial soundness of their suppliers. In all these situations, the Z-score can be used to protect companies from surprises that could have disastrous consequences.