Evaluation of Corporate Bankruptcy Prediction Models in Indonesia

  • Sebastian Siburian
  • Imo Gandakusuma

Abstract

This study aims to determine the value of various bankruptcy prediction models in the Indonesian business environment and to determine an accurate bankruptcy prediction model in the Indonesian business environment. This study uses data from companies listed on the Indonesia Stock Exchange that have financial statements for the financial year ending in 2015 - 2019. This study processes data with 4 bankruptcy prediction models, namely Altman EM (Altman et al., 1998), Ohlson (1980), Taffler (1983), Zmijewski (1984). In addition, this study also includes re-estimating the coefficients, testing the Chi-Square validity, and calculating type I II errors. This study will produce an analysis of financial performance on the risk of bankruptcy based on these 4 models. The results of this study indicate RE Ohlson has a high level of accuracy and the lowest error I compared to other models and is expected to provide information and become one of the considerations in decision making.

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Published
2021-09-01
How to Cite
SIBURIAN, Sebastian; GANDAKUSUMA, Imo. Evaluation of Corporate Bankruptcy Prediction Models in Indonesia. Asian Journal of Research in Business and Management, [S.l.], v. 3, n. 3, p. 15-23, sep. 2021. Available at: <https://myjms.mohe.gov.my/index.php/ajrbm/article/view/15103>. Date accessed: 19 oct. 2021.
Section
Articles