Financial Distress Analysis Using The Springate and Altman Z-Score Methods in Manufacturing Companies Listed on The Indonesia Stock Exchange

Stephanie Dwi Wahyuning Tyas; Shelly  Brilliant; Titin  Suhartini; Muhammad Fajar  Raharjo; Muhammad Zacky Syauqy Ibnu  Shodiq

doi:10.38142/jogta.v4i3.1800

Authors

Stephanie Dwi Wahyuning Tyas Insan Pembangunan Indonesia University, Tangerang, Indonesia
Shelly Brilliant Insan Pembangunan Indonesia University, Tangerang, Indonesia
Titin Suhartini Insan Pembangunan Indonesia University, Tangerang, Indonesia
Muhammad Fajar Raharjo Insan Pembangunan Indonesia University, Tangerang, Indonesia
Muhammad Zacky Syauqy Ibnu Shodiq Insan Pembangunan Indonesia University, Tangerang, Indonesia

DOI:

https://doi.org/10.38142/jogta.v4i3.1800

Keywords:

Financial Distress, Springate (S-Score), Altman Z-Score, Manufacturing Company Minimum

Abstract

This study analyzes the ability of the Springate and Altman Z-Score methods in predicting financial distress in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2018- 2022. Although the Indonesian capital market shows positive growth, external challenges such as global economic fluctuations and geopolitical pressures (The Perfect Storm) emphasize the importance of early detection of financial distress to prevent the risk of bankruptcy. This study uses an associative quantitative approach. The research sample consists of 75 financial reports from 15 manufacturing companies, selected through a purposive sampling technique over five years of observation. Data analysis involves descriptive statistics, normality tests, and hypothesis testing (F-Test and t-Test) using SPSS 23.0. The results of the hypothesis testing indicate that both the Springate and Altman Z-Score methods simultaneously and partially have a positive and significant effect in predicting financial distress in manufacturing companies on the IDX. However, based on the accuracy analysis (R-Square), the Springate model (S-Score) is proven to be superior with an accuracy level of 73% (or 73.7%), which is categorized as having very strong closeness. Meanwhile, the Altman Z-Score model had an accuracy rate of 42.3%, categorized as having a strong correlation. The superior accuracy of the Springate model is supported by the use of the Earnings Before Taxes to Current Liabilities (EBTCL) ratio, which is considered more representative. This study concluded that the Springate method was the most accurate model in predicting financial distress in manufacturing companies on the Indonesian Stock Exchange (IDX).

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