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

Abstract

This study aims to determine whether there is a difference in the prediction results between the Altman, Springate, and Zmijewski models and the most accurate prediction model for predicting the bankruptcy of retail companies in Indonesia and Singapore. This research is descriptive quantitative. The sampling method used was purposive sampling with 15 Indonesian retail companies and 15 Singapore retail companies. This study used descriptive analysis, normality test, and One Way ANOVA test using an SPSS program. The results showed that: 1) There are significant differences between the Altman model, Springate model, and Zmijewski model in Indonesian retail companies. 2) There is a significant difference between the Altman model, Springate model, and Zmijewski model in the Singapore retail companies. 3) The most accurate model in predicting the bankruptcy of Indonesian retail companies is the Zmijewski model. 4) The most accurate model in predicting the bankruptcy of Singapore retail companies is the Altman model.

An Application of X-score Model to Analyse Factors Affecting Financial Risk of Medical Companies Listed on Vietnam Stock Market

“…They found that X-score model produced the highest level of prediction accuracy (97.9%). Similar conclusion can be seen in the study of Ashraf et al (2019), Tanjung (2020), Andriani & Sihombing (2021) and Muzanni & Yuliana (2021).…”

“…In contrast, having positive X-score (X-score ≥ 0), the firm is then classified into the group with high possibility of financial difficulties. The X-score model (Zmijewski, 1984) has been frequently used to forecast company's financial risks in many countries such as in the US (Sayari & Mugan, 2017;Lagkas & Papadopoulos, 2014), India (Singh & Mishra, 2016), Kuwait (Musaed et al, 2018), Pakistan (Ashraf et al, 2019), Indonesia and Singapore (Nilasari & Haryanto, 2018;Tanjung, 2020;Andriani & Sihombing, 2021;Muzanni & Yuliana, 2021).…”

Analysing the Financial Distress at PT. Telekomunikasi Indonesia Tbk: An Application of Springate Approach

“…If the Z value is below 0.862, then the company is considered to be in danger of bankruptcy. One way to measure the health of a company with the Springate method is to analyze bankruptcy with a sample of 40 companies using the MDA method (Muzanni & Yuliana, 2021). Springate found 4 ratios out of 19 financial ratios that contributed to the prediction of company bankruptcy.…”

Financial Analysis of Retail Companies Using the Altman, Springate, Zmijewski, Fulmer, and Grover Bankruptcy Prediction Models

“…Previous research related to the Altman Z-Score bankruptcy prediction model when predicting company bankruptcy produces an accuracy rate of 71.6%-89.5% studied by (Arini, 2021;Mulyani et al, 2018;Muzanni & Yuliana, 2021) Previous research predictive model Springate bankruptcy has an accuracy rate of 60%-83.33% which was studied by (Arini, 2021;Mulyani et al, 2018;Muzanni & Yuliana, 2021). Previous research on the Zmijewski bankruptcy prediction model resulted in an accuracy rate of 60%-87% which was studied by (Mulyani et al, 2018;Muzanni & Yuliana, 2021). Previous research on the Fulmer model in predicting corporate bankruptcy resulted in an accuracy rate of 71.6%-100% (Mulyani et al, 2018;Parquinda & Azizah, 2019).…”

“…Model Springate (S-Score) namely a bankruptcy prediction method that uses several financial ratios, such as profitability, liquidity, and asset turnover ratios. The Springate model can be used as a method for estimating bankruptcy which has an 80% accuracy rate (Muzanni & Yuliana, 2021). From this description, the following hypothesis is proposed: H2: The financial condition of retail companies listed on the Indonesia Stock Exchange (IDX) in the 2019-2020 period can be measured using the Springate bankruptcy prediction model.…”