Abstract:
This study examines the prediction of corporate bankruptcy using the Altman Z-
score method in manufacturing companies listed on the Indonesia Stock Exchange
(IDX) from 2013 to 2022. Altman Z-score uses key financial ratios suchas Working
Capital to Total Assets, Retained Earnings to Total Assets, EBIT to Total Assets,
and Equity to Total Liabilities to evaluate financial health and bankruptcy risk. The
results showed that while some companies showed resilience, others faced
significant financial difficulties, indicating a higher risk of bankruptcy. This study
highlights the Altman Z-score as an effective tool for early warning in financial
decision-making for investors and managers. Its limitations include incomplete
financial data and not incorporating external factors such as market fluctuations and
regulatory changes, which may affect the accuracy of predictions. Despite these
challenges, this study offers valuable insights into bankruptcy risk in the Indonesian
manufacturing sector.
