Financial Distress and firm Performance of Listed Plantation Companies in Sri Lanka: an Application of Altman’s Model

Abstract

: The research investigates the financial distress on the financial performance of listed plantation companies in Sri Lanka by applying Altman's model. All 19 plantation companies in the Colombo Stock Exchange were selected as a population. The study period is five years, from 2015 to 2019. Altman's Zscore model is used to diagnose the financial health of companies, and then the impact of financial distress is measured on financial performance. The study shows a significant association between financial distress and financial performance in the plantation companies on the Colombo Stock Exchange. The research outcomes also exhibit that a company's financial performance increases with the rise in Z score values and decreases in financial distress.