Analysis of Financial Distress Risks in BIST Energy Companies Using Altman, Springate, Grover, Zmijewski, and Fulmer Models

Abstract

Purpose – This study aims to analyze the financial distress risks of companies operating in the energy sector, which is one of the fundamental pillars of modern economies. The research focuses on the necessity of evaluating the financial structures of energy companies affected by factors such as increasing energy demand, stricter environmental regulations, and economic uncertainties. Design/methodology/approach – The study employs the annual financial data of companies in Borsa Istanbul's energy sector for the 2019-2023 period. The financial distress risks of these companies were comprehensively analyzed using the Altman, Springate, Grover, Zmijewski, and Fulmer models. Findings – The analysis results indicate that while some companies in the energy sector are at high financial risk, an overall recovery trend is observed across the sector. This highlights the necessity for companies to take strategic measures to strengthen their financial structures. Discussion – The study provides a multidimensional analysis of financial distress risks in the energy sector. It is recommended that companies adopt effective debt management, invest in renewable energy, and develop strategies to enhance profitability. These findings offer valuable insights for sector stakeholders and investors.