Abstract— The purpose of this study was to look into the financial health of Indian passenger automobile makers. Financial health evaluations have been practiced for a long time. Duration of the study is from 2015-16 through 2019-20. In this research, Altman's Z Score is used to evaluate the financial performance of automobile sectors like commercial vehicles, passenger cars, and diversified. However, in this research, Altman's Z Score is considered for passenger car manufacturers. The Altman Z-score is a credit-strength test result that is derived using data from a company's annual report and is based on five financial measures. “In 2020, India was the world's fifth-largest car market, with 3.49 million passenger and commercial vehicles sold”. It was the world's seventh-largest commercial vehicle manufacturer in 2019. Domestic automotive manufacturing increased at a CAGR of 2.36 percent between FY16 and FY20, reaching 26.36 million vehicles. Between FY16 and FY20, domestic automotive sales increased at a 1.29 percent compound annual growth rate (CAGR), with 21.55 million vehicles sold in FY20. Between FY16 and FY20, domestic automotive manufacturing increased at a CAGR of 2.36 percent, reaching 26.36 million vehicles. Domestic automotive sales increased at a 1.29 percent compound annual growth rate (CAGR) between FY16 and FY20, with 21.55 million vehicles sold in FY20”. Production volume of mainly passenger vehicles, three-wheelers, two-wheeler, and quadricycles reached 2,214,745 units in October 2021 (excluding BMW, Mercedes, Tata Motors, and Volvo Auto). The total number of passenger vehicles produced by manufacturers in the country in FY21 was 22,652,108. The automobile sector is currently confronting challenges in order to reduce liquidity risk and increase profitability, not only in India but globally. By 2022, the major automobile firms in India are anticipated to make India the world's leader in the two-wheeler and four-wheeler sectors. To overcome the difficulties and meet the challenges of vehicle production, industries are encouraged to bring in additional investments into the stream in order to reduce liquidity risk and increase profitability. The liquidity and profitability trade-off can be effectively addressed in the manufacturing sector by enhancing and implementing effective monetary methods. The study aids in the provision of recommendations to businesses in order to help them avoid financial difficulty by utilizing Altman's Z-Score model, a popular tool for predicting bankruptcy. In this study, the financial performance of vehicle firms was examined, as well as the risk of bankruptcy for a sample of automobile companies in the industry
