In order to meet increased demand for services, municipalities are compelled to use their resources in a most efficient manner. The regular collection of revenues in municipalities, while making expenditures in most efficient ways depend on the healthy functioning of the budget and accounting and the financial control system correspondingly. In is necessary for municipalities to continuously control the balance of incomes and expenses, determining and eliminating the negativities in this balance. For this purpose, financial analyses and management ratios are needed. With the financial analyses made, a financial control system may be established in a municipality and used for management purposes. Municipalities which continuously produce information by means of financial control, will be able to take corrective measures in line with these information, take expenditure decreasing measures by determining which items cause the increases and decreases in incomes and expenditures and undertake income increasing procedures. For this purpose, financial analysis varieties were mentioned in the study and a practice made by the Beylikdüzü Municipality for the analysis of financial statements, obtained as a result of the accrual based accounting system, in public institutions included herein.
The aim of the current study is to assess the financial distress risk of the metropolitan municipalities in Turkey from 2012 to 2017 using Altman's Z''-Score, an accounting-based financial distress prediction model. Design/methodology/approach-Altman Z''-Score model was applied to the data from 2012 to 2017 for 30 metropolitan municipalities in Turkey. Microsoft Excel Program was used to calculate the four financial ratios, place them in the model and find the Z''-Score values. Paintmap application was used to create the risk map for the Turkish metropolitan municipalities based on the results. Findings-The results showed that four of the metropolitan municipalities gradually moved to the red zone based on the 2012-2017 data. However, only two of these municipalities were placed in the red zone based on the mean. Similarly, ten of the municipalities moved to the grey zone over time, but only one of these municipalities were in the grey zone with respect to the mean whereas all the other metropolitan municipalities were in the safe zone. Discussion-The results of the current study show that the fiscal performance of the metropolitan municipalities in Turkey seems to be better than expected. The effects of accounting errors in Audit Court Reports on statements and analysis of statements, which can be quite misleading, may be investigated in future research.
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