PREDICTING THE BANKRUPTCY PROBABILITY OF RETAIL GROCERIES COMPANIES IN INDONESIA BY UTILIZING ALTMAN’S Z-SCORE MODEL

Abstract

Purpose - The purpose of this study is predicting the bankruptcy probability of retail groceries company by assessing the overall annual report of retail groceries companies listed in Indonesia Stock Exchange to know the financial condition and status in current downturn phenomenon of retail groceries publicly company by utilizing the method of Altman’s Z-Score Design/ methodology/approaches – This research paper utilizes the secondary data which are the annual report of retail groceries publicly company that are listed on Indonesia Stock Exchange. The data come from Indonesia’s Stock Exchange official Website, IDN Financial website and companies listed official website. The annual reports of all companies are collected from 2013 up to 2017. Altman’s Z-Score Model (1993) for non-manufacturing company is applied to know the financial condition and status of retail groceries publicly company in Indonesia. Findings – The Z-Score value of five retail groceries companies which are HERO, MPPA, RANC, AMRT, MIDI declines in 2017. The result indicates the downturn phenomenon of current retail industry affects the financial performance and status of those retail groceries publicly company in Indonesia. In 2017, the 3 out of 5 companies is categorized facing financial distress and having a high probability to face bankruptcy. Originality/value – Originality of this research paper is on the analysis of Z-Score value of retail publicly company that focuses on groceries sector in Indonesia.