Using Financial Distress Prediction Models in Al-Zawiya Oil Refining Company: An Analytical Study

Abstract

This research seeks to assess the fiscal condition of Al-Zawiya Oil Refining Company and to determine whether it is experiencing a financial downturn that may lead to insolvency، employing quantitative models specifically developed for this analysis، namely the Altman، Springate، Kida، and Sherrod models. Furthermore، the study intends to ascertain whether discrepancies exist in the outcomes of these models regarding the prediction of financial distress. In conclusion، the research indicates that the financial deterioration of Al-Zawiya Oil Refining Company could indeed precipitate financial failure، attributed to diminished profitability and ineffective operational practices. The findings revealed no significant differences between the results of the Altman and Springate models، while the Sherrod model exhibited slight variations in the severity of financial decline. Conversely، the Kida model produced results markedly distinct from the other three. Consequently، the study advocates for the utilization of the Altman، Springate، and Sherrod models for financial assessments within the industrial sector.