Comparative analysis of bankruptcy risk using Altman, Taffler, and Zmijewski models of a selected Zimbabwe Stock Exchange listed extractive sector firm

Abstract: The research compared the predictive accuracy of Altman Z Score, Taffler Z Score and Zmijewski X Score bankruptcy analysis models in relation to a listed Zimbabwe Stock Exchange listed extractive sector firm from 2011 to 2022. The objective was to determine the most accurate models in predicting corporate distress within Zimbabwe’s volatile economic environment. The study employs a quantitative methodology analysing secondary data from the published annual audited reports as well as independent external auditor reports for two periods: USD denominated reporting (2011 to 2018) and ZWL denominated reporting (2019 to 2022) following the introduction of statutory instrument 33 of 2019. The Zmijewski X Score achieved greater predictive accuracy of 91.67% thus correctly identifying 11 of 12 sample years with zero Type 1 error with 8.33% Type 11 errors. The Altman and Taffler models achieved 83.33% accuracy, correctly predicting 10 out of 12 sample with Type 11 error at 16.67%. Cross validation with External independent auditor report confirms the firm in financial distress from 2010 to 2018, and in 2021 to 2022. The firm was solvent in 2019 and 2020 of which only the Zmijewski X Score accurately predicted. The findings thus demonstrate superiority of the Zmijewski model which implies a credible tool for investors and creditors in making decisions in relation to monitoring and capital allocation. Therefore, there is need to adopt multiple models in the analysis to mitigate the limitations of using one model. In relation to the agency theory, the adoption of an accurate predictive model reduces information asymmetry thus enhancing oversight efficiency and curbing managerial optimism. This will provide a reliable indicator of the agent’s financial stewardship. Keywords: Bankruptcy prediction, Altman Z Score, Taffler Z Score, Zmijewski X Score, Agency theory. Title: Comparative analysis of bankruptcy risk using Altman, Taffler, and Zmijewski models of a selected Zimbabwe Stock Exchange listed extractive sector firm Author: Kudakwashe MAVENGERE International Journal of Novel Research in Marketing Management and Economics ISSN 2394-7322 Vol. 13, Issue 1, January 2026 - April 2026 Page No: 1-10 Novelty Journals Website: www.noveltyjournals.com Published Date: 04-February-2026 DOI: https://doi.org/10.5281/zenodo.18484412 Paper Download Link (Source) https://www.noveltyjournals.com/upload/paper/Comparative%20analysis%20of%20bankruptcy%20risk-04022026-1.pdf