The Application of Altman & Springate Models In Bankruptcy Prediction of Accepted Companies In Tehran Stock Exchange

The investors are always trying to prevent from losing their capital ad interest through predicting the probability of the bankruptcy of a Company since in the event of the bankruptcy, value of the securities decreases intensely. So, the investors are looking for methods by which they could predict the bankruptcy of the Companies. Moreover, one of the issues discussed 'in financial management is the investment and trust in the investment and one of the things that could help the investors to make right decisions in their investments is the existence of some tools and models for the assessmenl of financial status and the condition of the Organizations.The purpose behind this research is to determine the efficiency of Altman and Springate Models in predicting the bankruptcy of a Company. The statistic Community on which this research was 'made is~ the successful and bankrupted Companies in Tehran's Security Exchange and the required Data to make this research is collected in a period of five years (2001-2006). After calculating the ratios existent in the models and determining z index, accuracy and error for each of the models are calculated . Regarding the results obtained from the, research, both, of Altman and Springate Models have the capability to predict 'the bankruptcy of the Companies in Tehran's security Exchange while Altman Model enjoys from more accuracy in comparison with Springate Model. So, the prospective investors, shareholders and others are recommended to use Altman Model in predicting the bankruptcy of the Companies accepted in Tehran 's Security Exchange.