Open AccessUnderstanding the connection of Performance and Z-Scores for Manufacturing Firms in South Korea
Author(s) -
Foo See Liang,
Shaak Pathak
Publication year - 2019
Publication title -
journal of asian development
Language(s) - English
Resource type - Journals
ISSN - 2377-9594
DOI - 10.5296/jad.v5i3.15555
Subject(s) - equity (law) , return on equity , position (finance) , regression analysis , demography , geography , economics , business , statistics , political science , mathematics , finance , sociology , profitability index , law
South Korea is a key leading economy in the Asia Pacific region. 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 this market. A linear regression has been conducted between these variables to determine the magnitude and direction of their relationships. The trends of Z-Scores over a five-year period have also been analysed. The analysis covers the period from 2013 to 2017 (inclusive) and yields a statistically positive correlation between ROE and the Z-Score for the market. South Korea registered moderate mean and median Z-Scores. These findings further support the strong economic position of this market as an Asian giant.