Credit risk modeling is imperative for keeping firms safe from debt trap and bankruptcy.
The present study attempted to predict the default occurrence of steel sector firms using MDA, Logit
function and structural model. Study developed 2 models using MDA and Logit model, further study
also evaluated the Altman original model and calibrated model by applying it on sample data of
selected steel sector. The developed models have also been validated on the out-of-sample data. The
study obtained satisfactory statistical results pertaining to the developed models. The classification
results witnessed the following accuracies for MDA, Calibrated, Altman, Logit and Structural model
such as 89%, 74%, 11%, 91 and 18%. The validation accuracies obtained by mda, calibrated and
logit models are 27%, 59% and 91%.