USE OF ACCOUNTING-BASED MODELS FOR MEASUREMENT OF FINANCIAL PERFORMANCE: COMPARISON OF ALTMAN Z AND MFA SCORE

The aim of this study is to try to identify the presence of a relationship between index results of the Altman Z Score and MFA Score Models and the market values of the firms and to determine which model is more effective among these models. In a comparison of the two models, which is the study subject, the service sector was specially chosen. The main reason for preferring the service sector is that Altman Z Score Model was formed by firstly modifying the original Altman Z Score Model for the firms in the USA (United States of America) Service Sector. However, later, it was identified and recom-mended that this model was also valid for the firms of developing countries, MFA Score Model is a model developed specifically for Turkey. It was desired to identify that it can be measured not only the financial failures of the firms of interest but also their possible achievements in the future and to compare both models. Thus, for middle and long-term investors, investment support information based on more scientific fundamentals will be introduced. In addition, a dataset which will support the decision processes of in-firm stakeholders other than investors will be reached. In order to be able to reach the aims of interest, BIST in the service sector was used in the study. In the study, panel time series co-integration data were used and, as a result, it was understood that Altman Z-Score Model made an effect of 36.3% to the firm value for a lagging of one period, while MFA Model made an effect of 51.9% to the firm value for a lagging of one period. According to this, it was identified that MFA model data were more effective in the prediction of firm value.