Usability of Z-score for predicting bankruptcy risk: a case study for agrarian sector entities in Moldova

Bankruptcy prediction plays a crucial role, not only for individual companies, but also for the national economy. This helps companies identify financial problems before their situation becomes critical, allowing them to take corrective measures in time. In addition, the development of risk management strategies and the implementation of bankruptcy prevention policies become more effective. A popular method of predicting bankruptcy is the Z-score function, which combines several financial indicators to assess a company's bankruptcy risk. This study examines the use of the Z-score as a tool for evaluating bankruptcy risk for entities in the agrarian sector of the Republic of Moldova and aims to determine whether it can help identify early signs of bankruptcy risk. Through a literature review and the application of a relevant case study, the article highlights the effectiveness and limitations of using Z-score in bankruptcy prediction, offering recommendations for its use in financial analysis. The results suggest that the use of Z-score function in risk assessment models can significantly improve the accuracy of financial forecasts for entities in the agrarian sector of the Republic of Moldova.