Christos Ioannou Professor Petros Lois Dr Georgios Makrygiannakis


The objective of this study is to explore the course of the bankruptcy risk levels of acquired companies listed in Cyprus Stock Exchange. Mergers and acquisitions increase in number and value in contemporary global economy, yet with uncertain outcomes as the risk of realizing loses out of these agreements is often. Past research confirms that the level of performance following mergers and acquisitions is often lower than before. The originality of this study is that it explores the levels of bankruptcy risk following acquisitions rather than just the performance of acquired companies, and in that this is the first study in the marker of Cyprus. Altman’s Z score is used as a method to evaluate the levels of bankruptcy risk for a five years post-acquisition period. In addition, this study explores the level of influence of current ratio (CR), debt ratio (DR) and net profit analysis (NPA) to the course of the Z score values, using both Pearson correlations and holistic approach. The findings suggest that the levels of bankruptcy risk of the acquired companies increase in the period examined, and that this increase is mainly the result of changes to the current ratio (85%) and to the debt ratio (69%), rather than to profitability. Moreover, there are strong indications that the current is the main influence upon the levels of risk at the start of the post-acquisition period, gradually losing its lead to debt ratio.



risk of failure, financial performance, listed companies, Altman’s Z score, current ratio, debt ratio, net profit analysis


How to Cite

“Exploration of the Bankruptcy Risk Levels and Their Main Determinants of Acquired Listed Companies in Cyprus”. 2020. Cyprus Review 32 (1): 137-70. https://cyprusreview.org/index.php/cr/article/view/726.