Estimation of the Bankruptcy Risk of the Companies in the BIST Construction Index

Abstract

In this study, it is aimed to measure the effects of the recent négativedevelopments in the Turkish Construction sector on the financial failures ofthe companies in Borsa Istanbul Construction Index. This study isparticularly important with regard to determining whether the concordatannouncements, which started especially in the 3rd quarter of 2018, carry arisk for the construction sector and ascertaining whether there have beenany warnings beforehand.The financial statements of the companies in the construction sector in 2010-2018 period will be analyzed with the Altman Z score model to see if theycarry bankruptcy risk. In addition, by comparing the calculated Z scoreswith the stock prices of stock certificates, the extent to which theprobabilities of bankruptcy are priced in the stock market will also bemeasured.Predicting bankruptcy risk is vital for both firms and stakeholders. Thefindings will contribute significantly to strategy determination for firms andinvestors in this sector. On the other hand, the results will also guideinvestors' stock preferences.