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The Battle of Financial Prediction Methods: Which Is the Most Predictive?

Year: 2025

Type: article

Abstract: In this study we consider how the pandemic affects the company and evaluate its impact on operations, financial stability, and prospects. As a result, the financial difficulty model should be constructed as a model of early warning systems. Like this attempt, the aim is to prevent the company’s bankruptcy. This research aims to analyze the accuracy of the most accurate predictor model of financial difficulty among the various predictors of financial difficulties. The models are Altman, Springate, Zmijewski, and Grover. Data is collected through an Excel pool and then processed in quantitative research. The dummy variable is used to do this. The sample consisted of 145 manufacturing companies listed on the Indonesian Stock Exchange from 2016 to 2020. The analytical tool used is binary logistic regression. The results suggest that the Zmijewski, Springate, and Grover models and the Altman models can be used to predict financial difficulties. Because of its highest significance level compared to other models, the Grover model is the most appropriate model for predicting financial difficulties. In cases where primary emphasis is given to assets and ROAs as indicators of financial difficulties, the Grover model is used.

Source: Economic Annals-ХХI

DOI: 10.21003/ea.v216-03

Authors: Nurmala Ahmar, Dwi Prastowo Darminto, Rida Ayu Priandari

Institution: Pancasila University

Language: English

Topic: Financial Distress and Bankruptcy Prediction

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W4415123309

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