Argenti's 'A' score and Altman's 'Z' score models Essay

Argenti's 'A' score and Altman's 'Z' score models - Essay Example Simply speaking, a corporate failure may be defined as a situation when a company goes bankrupt and is thus forced to quit its business activities. Off course it is quiet obvious that any corporate concern goes out of business only if it fails on some fundamental parameters. Thus, corporate failure analysis constitutes and integral part of the contemporary business scenario. Hence the aim of any pragmatic corporate failure analysis is to identify the tell tale symptoms that are discernibly indicative of the fact that a company is heading towards annihilation. Such an analysis enables the management, administration, financial institutions and creditors to strive for and press on the need for introducing the apt countermeasures in advance so as to avert any possibility of a pending corporate failure. Till date, the concept of corporate failure analysis is predominated by two diverse approaches, one of which is purely quantitative whereas the other is thoroughly qualitative in its scope. If one holds that most of the corporate failures can be attributed to financial lapses, then it is certainly possible to avert any corporate failure by resorting to a timely and apt financial analysis. On the contrary there exists one other approach that believes that most of the corporate failures are caused by non-financial lapses and irregularities and financial irregularities in any company are a mere side effect of the discrepancies existing in the qualitative aspects of business. In the light of the given discussion, Altman’s ‘Z’ Score model is a noteworthy quantitative approach towards corporate failure analysis, whereas Argenti’s ‘A’ Score model definitely stands to be its consummate qualitative counterpart. Altman's Z-score model is an important performance management and company failure analysis tool. Also known as Altman's Bankruptcy Predictor, this model was given by Edward I. Altman in 1968, who worked as a professor of finance at the New York University (Calandro 2007, p.37). This model is primarily a statistical formula that can be exploited to predict corporate performance. The basic strategy behind this model is that it depends for its validity on a series of chosen financial ratios and each and every selected key ratio is assigned a weighting. The Z score derived through the incorporation of the key ratios in the mathematical formulas is used to predict whether a company is liable to fail or not. The Z score calculated through a detailed data analysis is eventually used to predict the sustainability of a company. In case this Z score surpasses a specific figure, the company being analyzed is considered to be safe. A Z score of above 3 is considered to be healthy and safe while a score lying around 1.8-3 is regarded as being precarious. Thus Altman's Z score model is to a great extent dependent on the data culled out from a company's published financial statements and its reliance on the qualitative aspects of business is almost negligible Advantages of Z score model are: This model is considered to be highly accurate. In more then 72% of the cases, it has been found to successfully predict corporate bankruptcy. It is easy to calculate. This model can be used to complement other analytical tools. This model enables the analysts to incorporate many financial characteristics within a single score. The Disadvantages of Z score model are: It focuses only on financial data. Z score does not help the management to understand the dynamics of the problems existing in the company. The results may turnout out to be inaccurate in case of a corruption of the financial data. It is not useful for predicting company failure in the current scenario as it is based on out of date assumptions and data (Grice 2001, p.57). Its results do not stand to be that accurate in case of

A Study on the Effect of De-Selection on Elite Youth Footballers Essay

A Study on the Effect of De-Selection on Elite Youth Footballers - Essay Example The entrants to the scholarship program were from the best players between age 16 and 19. Each of the participants performed two interviews. Each interview averaged a time of sixty minutes. The interviews were conducted in locations of their choice. The interviews did not follow a tight schedule; instead, they were reflexive with provisional themes prepared moments before the interviews. The role of the interviewer was to enable the interviewee to narrate his tale in his own manner. Thus, the interviewer was an active listener. The interviewer stored each interview in an audiotape and transcribed before another interview took place. The interviewer pursued emerging issues in the next interview. After the accumulation of the data, the researchers analyzed it by reading the transcripts with the view of identifying narrative segments and themes in the transcripts. They then followed this with writing analytical memos to provide links to common themes. The researchers followed these iden tical concepts in the next meeting. From the data obtained, the researchers were able to reconstruct the lives of the correspondents before and after their de-selection. The methodology used and justification for its use. ... 572). In the interpretive biography, researchers begin by finding written documents and other records. Some may be of a quantitative nature, but it is relevant if it helps describe a person’s life. Nevertheless, the main material in this research emanates from the numerous interviews the researcher has with the respondent. Of most interest, are events that led to a remarkable change in the respondent’s life. The researcher may want to visit the actual place where the event occurred. After this, the researcher tries to decipher the meaning of those events in the respondent’s life. The researcher may rely on his impression about the event. The interpretive biography method involves the use and acquisition of documents pertaining to a subject’s; personal life, accounts and narratives that elucidate on significant milestones in a person’s life. The central focus of the interpretive biography method is a person’s life experiences (Lewiss-Beck & Br yman 2004, p. 507). The use of the biographical method has its basis on the argument that, those who lived are the only ones who can know their lives. Alternatively, through their representations, which include stories and personal narratives among others. The meaning of these events is only visible in the performances of those who lived those lives. According to Thomas Murray 2003, researchers design biographies to serve several functions. One of the purposes is to preserve a record of a prominent person’s development and contributions. Another purpose is to correct mistaken identities. It can also serve to teach readers lessons through another person’s life or to trace public and private actions of the subject in view of finding