Bankruptcy Prediction By Using The Grover Method

Abstract

This study aimed to determine and analyze prediction of bankruptcy in telecommunication companies listed on the Indonesia Stock Exchange by using the Grover method. The approach of this research was a descriptive approach. The population in this study was telecommunication companies listed on the Indonesia Stock Exchange, namely five companies. The sampling technique in this study was purposive sampling, so that four selected companies were sampled. Data collection technique in this study was documentation technique. The data analysis technique in this study was descriptive, using the Grover method to predict bankruptcy. The Grover method formula was: 1,650X1 + 3,404X3 0,016ROA + 0,057. This study used three financial ratios, including: Working Capital to Total Assets (X1), Earning Before Interest and Tax (X3), and Return On Assets (ROA). The Grover method categorized companies as bankrupt with G-Score was equal to or less than -0.02 (G ≤ -0.02). G-Score for companies which were not bankrupt was equal to or more than 0.01 (G 1 0.01). Companies with G-Score between the upper and lower limits were in the gray area. The findings showed that company that never had a GScore bankrupt category was PT Telekomunikasi Indonesia Tbk , while companies that had had a G-Score bankrupt category were PT Indosat Tbk from 2013 to 2017, PT Smartfren Telecom Tbk from 2012 to 2017, and PT XL Axiata Tbk from 2015 to 2017. And there had been an increase in the number of companies which were predicted to experience bankruptcy.