Impact of financial distress on financial performance -a study related to pakistani corporate sector

The research is intended to investigate the association b/w financial distress and financial performance. The sample companies selected are 15 and the study period is six years from 2007-2012. The study performed on non-financial companies that are listed on Karachi stock exchange selected from Fuel and Energy sector. The Altman’s Zscore model is used for diagnosing the financial health of the companies and then impact of financial distress is measured on financial performance. The study shows that there exist a significant association between financial distress and financial performance. The outcomes of the research also exhibit that financial performance of companies increase with rise in Z score values and with decrease in financial distress.