PREDICTION OF FINANCIAL DISTRESS IN THE AUTOMOTIVE COMPONENT INDUSTRY: AN APPLICATION OF ALTMAN, SPRINGATE, OHLSON, AND ZMIJEWSKI MODELS

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Hendra Pratama
Bambang Mulyana

Abstract

This study aims to identify and examine the condition of financial distress in the automotive component industry issuers in the period 2014 ~ 2018, using the Altman Z-score, Springate S-score, Ohlson O-score, and Zmijewski X-score against financial ratios as an analysis form of company management to predict the early warnings of company bankruptcy. This study uses quantitative, secondary, and panel data; while the sample uses a non-probability boring sampling technique of 11 companies. The results showed that these four models can predict financial distress by identifying each model. Altman’s model found 8 distress zone points, 16 grey zone points, and 31 safe zone points. Springate’s model found 37 points in the distress zone, and 18 points in the safe zone. Ohlson's model found 3 points in the distress zone, and 52 points in the safe zone. Zmijewski's model found only 1 point in the distress zone

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References

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