Main Article Content
Abstract
An insolvency and financial health prediction model is an important warning to decision-makers. This study aims to design a model that provides numbers and ranges for prediction of company insolvency and financial health. The study population is all the listed companies on the Indonesia Stock Exchange, while the sample consists of 216 companies that had negative equity from 2010 to 2019 and 216 companies with positive equity. The independent variables include the solvency and profitability ratios in one and two years before the insolvency. Logistic regression was used as an analysis tool. The results are 24 prediction models. The comprehensive one revealing the solvency ratio in the previous one year and the profitability ratio in the previous one and two years can predict the probability of insolvency and financial health.
Keywords
Article Details
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).