This article deals with the meaning of financial distress, its effects and also some of the indicators of financial distress. Financial distress, if not tackled on time, will lead to bankruptcy. This article aims at using bankruptcy prediction model developed by Edward Altman, Professor of Finance, Stern School of Business, New York University, i.e., the application of Z-Score method to Geno Pharmaceutical Company Ltd., for the purpose of predicting its financial health.

A good financial analysis will help to identify the strengths and weaknesses of a company and allow making more informed management decisions. The company will be able to improve its financial image thereby enhancing its chances when applying for a bank loan for various activities. Also, it will be able to identify and correct performance problems before they have a major impact on the business.

Financial ratio analysis is one of the important methods of analyzing a business. Financial ratios can be used to measure a firm's liquidity, solvency, profitability and efficiency in utilizing its assets. In addition, these ratios can be used to compare the performance of one company against those of its competitors or other members of the same industry. The ratios calculated intend to show broad trends and thus to help one with decision-making.

Financial distress may be defined as a situation where a firm is not able to meet its maturing obligations on time. A high degree of financial leverage increases the risk of financial distress and ultimately leads to liquidation. With the result, both the equity and debt-holders are adversely affected.

Measuring Financial Health, Z-Score Analysis, Edward Altman, Geno Pharmaceutical Company Ltd, Financial Ratio Analysis, Earning Before Interest and Tax, EBIT, Technological Innovations, World Health Organization's, Food and Drug Administration, FDA.