Potential Bankruptcy Detection in the Food and Beverage Industry: Altman Z-Score Approach in the Indonesian Stock Exchange

Willa Fatika Sari (), Abdul Hafiz, Berandi Suaryansyah and Andre Riswanto
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Willa Fatika Sari: Universitas Bangka Belitung, Faculty of Economics and Business
Abdul Hafiz: Universitas Bangka Belitung, Faculty of Economics and Business
Berandi Suaryansyah: Universitas Bangka Belitung, Faculty of Economics and Business
Andre Riswanto: Universitas Bangka Belitung, Faculty of Economics and Business

A chapter in Proceedings of the 1st International Conference of Economics, Management, Accounting, and Business Digital (ICEMAB 2024), 2024, pp 68-74 from Springer

Abstract: Abstract This study aimed to analyze the potential bankruptcy of manufacturing sector companies, food and beverage industry in particular, which was listed in the Indonesia Stock Exchange (IDX) during 2018-2020 period. The study used the Altman Z-Score method to predict bankruptcy in three companies: PT Indofood CBP Sukses Makmur Tbk (ICBP), PT Indofood Sukses Makmur Tbk (INDF), and PT Mayora Indah Tbk (MYOR). The annual financial statements were analyzed using Altman Z-Score. The results showed that ICBP is in a distress condition with an average Z-Score of 1.368. INDF is in the grey area with an average Z-Score of 2.102, while MYOR is categorized as a healthy company with an average Z-Score of 6.725. Based on these results, advice is given to companies in distress to increase working capital, sales, and manage debt more effectively. Meanwhile, a healthy company is expected to continue to maintain its performance.

Keywords: Bankruptcy; Altman Z-Score; Financial Distress; Financial Statements; Manufacturing (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-614-7_10

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