Analysis of Method Used to Predict Financial Distress Potential in Pulp and Paper Companies of Indonesia

Abstract

This study aims to predict financial distress in pulp and paper companies in Indonesia. The data used are the financial statements of each pul and paper company listed on the Indonesia Stock Exchange in 2012-2017.
 Data analysis techniques used descriptive analysis with three methods of financial distress prediction, namely the Altman Z-Score, Springate, and Zmijewski methods. The results showed that the Zmijewski method is a prediction method with the highest accuracy rate of 100%, with an error type of 0%. The Altman Z-Score method has an accuracy rate of 28.6%, with an error type of 71.4%.
 While the Springate method has an accuracy rate of 14.3%, with an error type of 85.7%. Therefore an accurate prediction method to predict the potential for financial distress is the Zmijewski method.

Comparative Analysis of Altman, Springate, and Zmijewski Models in Predicting the Bankruptcy of Retail Companies in Indonesia and Singapore

“…In addition, the researchers also analysed the level of accuracy of each model. Fadrul and Ridawati (2020)…”

Analysis of Bunkruptcy Prediction With Altman Z-Score, Springate and Zmijewski Models Based Engineering Science (Case study at Garuda Indonesia Airline, Period Years of 2014-2017)

“…Based on clasification level of using three models to make a bankruptcy prediction of the company, Zmijewski model has a more accuration in bankruptcy prediction of the company than others one. The reason was reinforced by some researchers who had given an evidence of using Zmijewski model, as Fadrul and Ridawati (2020) This reseach has a limitation, where scope of research focused just on Garuda Indonesia only. Furthermore research, we recommendate to compare with others airline, such as : Air Asia, Sriwijaya, Lion Air, Citilink,and Batik Air Airline,etc.…”

Analysis Financial Distress Prediction With Model Altman Z-Score, Zmijewski, And Grover In The Sub Sector Retail Listed On The Indonesian Stock Exchange (Idx) 2014-2018 Period

“…Company bankruptcy is usually characterized by difficulties to finance, production activities, difficulties in attracting loans from creditors, and refinancing [4]. Bankruptcy according to Peter and Yoseph (2011) in [1] is a company condition when it experiences insufficient funds to run its business.…”

“…The following is a table of financial distress prediction scores using the Zmijewski model in the retail sub-sector listed on the Indonesia Stock Exchange (BEI) in 2014-2018. 4 companies are predicted to be in a condition and the rest are predicted to be bankrupt. And 2018 is the same as in 2017.…”

“…The earlier the company knows the sign, the better it is for management because management can make improvements directly [3]. Financial distress prediction research has often been conducted in Indonesia, including research conducted by [1], [2], [4], [5], [6], and [7]. Based on the description above, the problem in this study is "How financial distress prediction in the retail sub-sector listed on the Indonesia Stock Exchange (BEI) for the 2014-2018 period uses the Altman Z-Score, Zmijewski, and Grover models" and "Which prediction model is most accurate in predicting financial distress in the retail sub-sector listed on the Indonesia Stock Exchange (BEI) for the 2014-2018 period".…”