CHOOSING THE BEST MODEL FOR RESTRUCTURING BUSINESS DEBT IN INDONESIA DUE TO THE PANDEMIC USING THE ALTMAN, SPRINGATE, AND ZMIJEWSKI MODEL

Abstract

Financial distress is the stage of the declining financial condition of a company before bankruptcy or liquidation. This phenomenon in Indonesia in recent years shows the increasing number of companies experiencing bankruptcy. This issue needs to be investigated because there are many interested parties. This study aims to choose the best model from the Altman, Springate, and Zmijewski models to predict the level of bankruptcies in an effort to restructure the business debt of retail companies. The sample of this research is the retail sector companies listed on the Indonesia Stock Exchange for the period 2014-2018. Based on the average difference test and then calculating the level of accuracy, the result is that of the three models above, the best for predicting the level of bankruptcy is the Springate model. Therefore, this study suggests restructuring the company's business debt in the retail sector, which experiences a lot of financial distress during the pandemic using the Springate model.