Continental and National Differences in the Financial Ratios of Investment Banking Companies: An Application of the Altman Z Model

Abstract

This research compares the financial ratios of investment banks across nations and continents. Ratios chosen were those in the Altman’s Z model used to predict bankruptcy. The investment banking industry was chosen because of its interest to a broad range of individuals. We found a significant continental and national variation in most of the ratios studied. Presentation of ratios in a classroom, analysis by investors, or consideration of firm financial heal using financial ratios should include consideration of these differences.