Validating the Effects of Disruptive Technologies using Operational Breakeven Theory, Relative Solvency Ratio and Altman’s Z-score on Selected Firms in Nigeria and India

Disruptive technologies (DT) have featured prominently in almost every human activity since the advent of computerization. The likely effects of DT on economic processes and human professions have and continue to generate fears and debates which spurred this investigation. To break away from the traditional approach the operational breakeven theory and the discriminant analysis techniques of Altman’s Z-score, and Enyi’s Relative Solvency Ratio were used to examine the relationship between firms’ market-induced-survival-ratio (MISR) and the disruptive technology gains index (DTGI) of seventy-three firms drawn from Nigeria and India. Descriptive and inferential statistics were used to analyze the data generated. The results showed that a sizeable number of firms has profited from the introduction of disruptive technologies with MISR and DTGI returning a 10% significant relationship while others are still struggling to measure up to the requirements of disruptive technologies in their chosen economic fields. The implication of this is that businesses must brace up and embrace digital transformation if they must stay afloat in this era of disruptive technologies. This study recommends a revolutionary approach to digital transformation in view of the fast pace of global integration while managers and business owners should adopt more pragmatic approach in appraising the operations and finances of a firm for effective results and timely responses to potential business challenges.