Evaluation of financial insolvency of transportation companies using the Altman Z-Score model to optimize decision making

Abstract

Companies have contributed to society by producing goods and services that help to satisfy people’s needs and generate employment. Nowadays, there are many challenges faced by companies due to the changing situations in the world, and the ones that stay in the market are those that manage to innovate, not neglect the customer, satisfy all their needs, and maintain adequate control of their finances, avoiding future insolvency problems.
This article aims to know the solvency situation of transport companies in the city of Cuenca during the years 2017 and 2020. The research has a quantitative approach, where the Altman Z2-Score method is applied, which allows knowing the probability of future solvency or
insolvency. The analysis is applied to the urban, interprovincial, and cargo transportation subsectors. By applying this method, it was determined that the urban transportation subsector is the one with the highest risk of falling into future insolvency. When analyzing the
companies according to their size, all of them were in the heal thy zone.