Written by Marc Oliveras

Article 1, Volume 3 Issue 2

Accounting ratio-based predictions: an analysis of the relationship between indicators of financial health and those of accounting manipulation

Joan Llobet-Dalmases, Dolors Plana-Erta and Àngels Fitó-Bertran

DOI: 10.26595/eamr.2014.3.2.1


Against a backdrop of global accounting harmonization, financial information is required to be useful and trustworthy for investors and other users. This study contributes to establishing whether there is a relationship between the Z-score model for predicting financial distress and the Z Vladu model for predicting earnings manipulation. Both models discriminate between companies using financial statement ratios.

Extracting data from the Sistema de Análisis de Balances Ibéricos (Iberian Accounts Analysis System, or SABI) database for medium-sized and large Spanish companies for the period 2005 to 2015, both summary indicators have been calculated and descriptive and bivariate analyses have been performed.

The results show that there is a relationship between both indicators, albeit a weak one.


  • Financial distress
  • Z-score
  • Earnings manipulation
  • Earnings management
  • Earnings quality
  • Spanish firms

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