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TO RECOGNIZE INDICATION OF FINANCIAL DISTRESS AND OR
BANKRUPTCY OF FIVE TEXTILE COMPANY FOR FIVE YEARS
PERIOD USING FIVE FINANCIAL DISTRESS MODELS
Usmansyah1*, Pudjiastuty2
Borobudur University, Jakarta, Indonesia12
usman_syah[email protected]1*, pudjiastuty[email protected]m2
PAPER INFO ABSTRACT
Received: 14th
January 2023
Revised: 17th
January 2023
Approved: 20th
January 2023
Background: In a business, risk of profit and loss is an inevitability. Every company
have their own ways to mitigate those risk, prepare a proper treatment, and other
efforts get the predetermined purpose, that is profit. Serious risk and its
consequences can bring company into financial distress, and in the next step can
become bankrupt. The Indications of it can be seen from the financial performance
of the companies.
Aim: To find out whether a company engaged in the textile and textile products sector
is in serious financial difficulty which could have implications for bankruptcy,
several theories have been developed. This study is to analyze indication of financial
distress and its possibility to become bankrupt. The study is using financial data of
five textile and textile product companies listed on the Indonesia Stock Exchange for
five years of 2017 – 2021, using five models of Analysis of Financial Distress, that
are Zmijewski Model, Fulmer Model, Grover Model, Altman Z-Score Model, and
Springate Model.
Method: This study uses secondary data on the textile companies listed on the
Indonesia Stock Exchange. The sample used in this study were five companies. The
sample selection uses purposive sampling. This type of research used in this research
is quantitative descriptive, namely research on problems in the form of the current
facts of a population. Testing research data using data analysis of model financial
distress.
Findings: This study uses secondary data on the textile companies listed on the
Indonesia Stock Exchange. The sample used in this study were five companies. The
sample selection uses purposive sampling. This type of research used in this research
is quantitative descriptive, namely research on problems in the form of the current
facts of a population. Testing research data using data analysis of model financial
distress.
KEYWORDS
Financial Distress; Bankruptcy; Textile and Textile Product; Financial Performance
INTRODUCTION
Textile and textile product (garment, clothing, apparel) are important commodity with its
significant role for country’s economy, and also in social life. In particular, the textile business
and textile products have an effect on employment, gross domestic product, balance of trade,
and others (Satya et al. 2018).
Nevertheless, it has become a reality that the textile and textile product industry is
growing rapidly and has a strategic role in the economic development, being a significant part
of domestic products and absorbing a large enough workforce (Saragih 2018). Textile and
textile product business players invest a lot of money in the development of this industry.
But textile and textile product are relatively unstable business, so that careful calculations
are needed in anticipating market fluctuations and prices of textiles and textile products. In
fact, many companies engaged in textiles and textile products are experiencing difficult
conditions, with poor performance (Agus Arman 2022).
Some determinants related to risk of textile industries in Indonesia are raw material
mostly should be imported, banking finance support is not conducive and also the rate of loan,
exchange rate, capital and workers intensive and so on (Sidabutar 2014). These factors will
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
25 Return: Study of Management, Economic and Bussines , Vol 2 (No 1), Jan 2023
affect the textile industrial development, even this industry actually is very challenging and
perspective, because of the huge needs of textile and product textiles.
As is well known, several textile and textile product companies experienced a surge in
cases of bankruptcy, which was marked by the number of companies experiencing losses,
including textile companies that had gone public and were listed on the capital market. It is
interesting to observe the dynamics of the textile and textile product industry, especially related
to the facts and indication tof financial difficulties or financial distress faced by textile and
textile product companies. If the condition of financial difficulties is not handled properly, it is
feared that the company will go into bankruptcy.
Some theories have been developed to recognize the financial distress or financial
difficulties, even this in only describe the indication. Appropriate, structured and effective steps
are needed to overcome financial difficulties so that they do not get worse which can lead to
bankruptcy (Sidabutar 2014).
To find out whether a company engaged in the textile and textile products sector is in
serious financial difficulty which could have implications for bankruptcy, several theories have
been developed. So far, 5 analytical models have been developed to measure whether a
company is in a state of difficulty or not. The analytical model that has been developed are
Zmijewski Model, Fulmer Model, Grover Model, Altman Z-Score Model, and Springate
Model. These models actually figure indication of financial distress or bankruptcy, and not a
fix signal of financial distress or bankruptcy. When the management knows the indication, then
they must take a proper action for next periods in order to overcome the financial performance
(Kholifah, Djumali, and Hartono 2020).
This study selected 5 companies in textile and product textile listed in IDX with its
audited financial statement for the year 2017-2021.What we hope is to know if any differences
result between the theories.
Table 1. shows the textile and product textile companies listed in Indonesian Stock
Exchange.
This article is focused on using audited financial statements of selected companies using
purposive sampling. The analysis will be descriptive. The period is five years and will be
analyzed using five models.
Table 1 Textile and Textile Product Companies listed in Indonesian Stock Exchange
No.
Code
Name
1
ADMG
PT Polychem Indonesia Tbk
2
ARGO
PT Argo Pantes Tbk
3
CNTX
PT Century Textile Industri Tbk
4
ERTX
PT Eratex Djaya Tbk
5
ESTI
PT Ever Shine Textile Industri Tbk
6
INDR
PT Indo-Rama Synthetics Tbk
7
MYTX
PT Apac Citra Centertex Tbk
8
PBRX
PT Pan Brothers Tbk
9
STAR
PT Star Petrochem Tbk
10
KARW
PT Karwell Indonesia Tbk
11
POLY
PT Asia Fasific Fibers Tbk
12
RICY
PT Ricky Putra Globalindo Tbk
13
SRIL
PT Sri Rejeki Isman
14
SSTM
PT Sunson Textile Manufacturer Tbk
15
TRIS
PT Trisula International Tbk
16
UNIT
PT Nusantara Inti Corpora Tbk
17
TFCO
PT Tifico Fiber Indonesia Tbk
18
UNTX
PT Unitex Tbk
Financial Distress
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
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(Hayes 2021) defines financial distress as a condition in which a company or individual
cannot generate sufficient revenues or income, making it unable to meet or pay its financial
obligations. This is generally due to high fixed costs, a large degree of illiquid assets, or
revenues sensitive to economic downturns. For individuals, financial distress can arise from
poor budgeting, overspending, too high of a debt load, lawsuit, or loss of employment.
By recognizing the signs of financial distress based on up-to-date data, companies can take
the necessary set of actions before they become acute and can no longer be handled with simple
steps. By recognizing these signs, companies can take proper actions to avoid devastation or
the occurrence of bankruptcy.
Bankruptcy is a legal proceeding initiated when a person or business is unable to repay
outstanding debts or obligations. The bankruptcy process begins with a petition filed by the
debtor, which is most common, or on behalf of creditors, which is less common. All of the
debtor's assets are measured and evaluated, and the assets may be used to repay a portion of
the outstanding debt (Hayes 2021).
There are some indication or warning signs to express if a company in a financial distress.
Usually, it can be seen from financial statement that show financial performance, i.e., profit
and loss statement. When a company is in this situation, there are some causes and need some
strategic action to overcome it. But clearly the bankers or other creditors will see this as a sign
not to lend the company. From financial statement, bankers and creditors can see the prospect
of business, the future of the company. When talking about financial, it means not just
statement of profit and loss, but also balance sheet, and even cash flow statement.
Profitability, liquidity, and operating capacity negatively affect financial distress, while
leverage and sales growth does not affect financial distress (Sutra and Mais 2019).
Bad financial performance may come from bad management, both in bad creating sales or
income and bad in controlling efficiency. This situation will cause low profit or even high loss.
If the situation goes for a long period, it could make the company in very serious bad situation,
that come into a hole of bankruptcy. Bad sales or income may come from bad quality of
products and or service, or high price, as a part of rapid competition. Usually this makes
consumers decide to buy from the competitors. Financial distress also can be seen when a
company cannot pay their debts or other obligations when it is in due date.
Financial distress can be seen in various ways, such as declining financial performance, the
company's inability to pay its obligations, the termination of dividend payments, cash flow
problems faced by the company, liquidity difficulties, layoffs of workers, and other conditions
that indicate financial distress. faced by the company. Based on the research background, the
dependent variables studied are profitability, liquidity, leverage, operating leverage and sales
growth (Sutra and Mais 2019).
Firms with low profitability, low liquidity, large size, low growth in operating profit and
high solvency will face a higher level of financial distress. Thus, this can be served as indicators
for managers to monitor their financial position in their corporations. Corporate managers must
realize the importance of early detections to avoid facing distressed and total lost in corporate
values of their firms (Thim, Choong, and Nee 2011).
When a company for a period of time having grey zone, and the management were not
able to cope up with those issues, then the company will be in distress zone (Soni 2019). The
sickness indications of the sample garment factories are not the same over the period under
review (Munawar, Firli, and Iradianty 2018). The identified causes of sickness are inefficiency
in working capital management, inefficient operations of current assets, underutilization of
available resources, the presence of idle capacity, below satisfactory of activity level in terms
of productions etc. The remedial measures suggest to providing sufficient working capital,
utilize resources properly, reduce idle capacity, ensure acceptable return on equity, reinvest
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
27 Return: Study of Management, Economic and Bussines , Vol 2 (No 1), Jan 2023
retained earnings, improve operating profit by reducing operating expenses, improve
satisfaction level of productions and sales operations etc (Sina et al. 2020).
METHOD
Finacial distress analysis method
There are five financial distress analysis methods used in this article.
Grover G-Score. (Husein and Pambekti 2015) Grover’s model categorizes companies in
bankruptcy with score less than or equal to -0,02 (Z ≤ -0,02). Meanwhile, the value for
companies categorized as non-bankrupt is more or equal to 0,01 (Z ≥ 0,01). The model
developed by Grover is in the following equation.
(1)
Where:
X1 = Total Assets / Working Capital
X2 = Total Assets / Income before Interest and Taxes
ROA = Total Assets / Net Profit
Altman Z-Score. (Safitra 2013) Altman’s model criteria of company’s bankruptcy are those
with a Z-Score less than 1,81 (Z < 1,81). Z-Score between 1,81 and 2,99 (1,81 < Z < 2,99) are
in the grey area, and Z-Score above 2,99 (Z > 2,99) are healthy companies. The model is
formulated as follows for public manufacturing company.
Z = 1,2 X1 + 1,4 X2 + 3,3 X3 + 0,6 X4 + 0,999 X5.
(2)
Where:
X1 = Total Assets / Working Capital
X2 = Total Assets / Retained Earnings
X3 = Total Assets / Income before Interest and Taxes
X4 = Book Value of Debt / Market Value of Equity
X5 = Total Assets / Total Sales
Fulmer H-Factor. (Lukman and Ahmar 2016) Fulmer model assess criteria in which if H < 0
then the company is in a state of bankruptcy, while H > 0 means the company is in a healthy
condition. The model is formulated as follows.
H = 5,528(V1) + 0,212(V2) + 0,073(V3) + 1,270(V4) – 0,120(V5) +
2,335(V6) + 0,575 (V7) +1,083 (V8) + 0,894 (V9) – 6,075.
(3)
Where:
V1 = Retained Earnings / Total Assets
V2 = Sales / Total Assets
V3 = Income before Tax / Total Equity
V4 = Cash Flow / Total Liabilities
V5 = Total Liabilities / Total Assets
V6 = Total Current Liabilities / Total Assets
V7 = Log Total Tangible Assets
V8 = Working Capital / Total Liabilities
V9 = Log Earnings before Interest and Taxes / Interest Expense
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
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Springate Score. Springate model classifies condition of company as healthy if the score is
more than 0,862 (S > 0,862) while the company that score less than 0,862 (S < 0,862) classified
as experiencing financial distress. The following is formula for Springate score.
S = 1,03 X1 + 3,07 X2 + 0,66 X3 + 0,4 X4.
(4)
Where:
X1 = Ratio of Working Capital / Total Assets
X2 = Earnings before Deducted Interest and Taxes / Total Assets
X3 = Ratio of Net Profit before Deducted Taxes / Current Liabilities
X4 = Sales Ratio / Total Assets
Zmijewski Score. (Pertiwi 2017) Zmijewski model assess criteria of company’s condition with
scores that if the value is negative means the company is in good health, otherwise if the value
is positive means the company is going bankrupt. This model is formulated as follows .
X = - 4,336 – 4,513 X₁ + 5,679 X₂ + 0,004 X₃.
(5)
Where:
X₁ = Net Profit / Total Assets
X₂ = Total Liabilities / Total Assets
X₃ = Current Assets / Current Liabilities
RESULTS AND DISCUSSION
Based on the financial statement data that has been audited by the Public Accounting Firm
and has been publicly announced in the media, the results of the calculation of the condition of
the companies sampled for the selected period are obtained and presented according to 5
predetermined methods.
The statistics calculated are the mean, standard deviation, and variance of 5 companies
over a 5-year period in each model used, to see how the data is distributed, the average health
of the companies for 5 years, and the record of the company's business volatility.
Table 2. shows the score of each method is used over 5-year period, with this score we can
figure the categories of financial condition of the selected companies as shown in Table 3.
Table 2 Calculation result of financial distress model of five companies over 5-year period.
Company
Methods
2021
2020
2019
2018
2017
INDR
Grover
0.599
0.154
0.180
0.282
0.257
Altman Z-Score
2.157
1.505
1.789
1.795
1.679
Fulmer H Factor
11.964
8.267
8.761
9.394
7.663
Springate
1.048
0.400
0.622
0.767
0.592
Zmijewski
(1.983)
(1.488)
(1.701)
(1.461)
(0.682)
TRIS
Grover
0.592
0.403
0.706
0.833
0.910
Altman Z-Score
1.437
1.415
1.967
1.988
1.611
Fulmer H Factor
11.561
10.335
12.401
12.342
11.776
Springate
0.729
0.585
1.056
1.122
0.994
Zmijewski
(1.503)
(1.148)
(1.494)
(1.977)
(2.022)
POLY
Grover
(0.458)
(0.461)
(0.526)
(0.532)
(0.568)
Altman Z-Score
0.030
(0.020)
0.152
0.253
0.116
Fulmer H Factor
(4.317)
(2.093)
(0.893)
(0.386)
0.619
Springate
(0.179)
(0.245)
(0.319)
(0.219)
(0.377)
Zmijewski
1.735
1.618
1.202
1.153
(0.799)
ARGO
Grover
(0.014)
(0.067)
(0.077)
(0.088)
(1.811)
Altman Z-Score
0.062
0.050
0.228
0.351
(5.094)
Fulmer H Factor
(14.624)
(13.249)
(12.605)
(11.469)
(8.724)
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
29 Return: Study of Management, Economic and Bussines , Vol 2 (No 1), Jan 2023
Springate
0.062
0.050
0.228
0.351
(1.228)
Zmijewski
0.076
0.067
0.096
0.122
6.215
SRIL
Grover
(4.189)
1.053
1.211
1.040
1.091
Altman Z-Score
(2.673)
1.733
1.911
1.753
1.560
Fulmer H Factor
11.764
9.636
8.505
8.533
8.321
Springate
(3.694)
1.158
1.503
1.317
1.280
Zmijewski
7.134
(0.915)
(1.050)
(1.073)
(1.005)
Table 3 Financial conditions of five companies over 5-year period.
Company
Methods
2021
2020
2019
2018
2017
INDR
Grover
H
H
H
H
H
Altman Z-Score
GREY
FD
FD
FD
FD
Fulmer H Factor
H
H
H
H
H
Springate
H
FD
FD
FD
FD
Zmijewski
H
H
H
H
H
TRIS
Grover
H
H
H
H
H
Altman Z-Score
FD
FD
GREY
GREY
FD
Fulmer H Factor
H
H
H
H
H
Springate
FD
FD
H
H
H
Zmijewski
H
H
H
H
H
POLY
Grover
FD
FD
FD
FD
FD
Altman Z-Score
FD
FD
FD
FD
FD
Fulmer H Factor
FD
FD
FD
FD
H
Springate
FD
FD
FD
FD
FD
Zmijewski
FD
FD
FD
FD
H
ARGO
Grover
FD
FD
FD
FD
FD
Altman Z-Score
FD
FD
FD
FD
FD
Fulmer H Factor
FD
FD
FD
FD
FD
Springate
FD
FD
FD
FD
FD
Zmijewski
FD
FD
FD
FD
FD
SRIL
Grover
FD
H
H
H
H
Altman Z-Score
FD
FD
GREY
FD
FD
Fulmer H Factor
H
H
H
H
H
Springate
FD
H
H
H
H
Zmijewski
FD
H
H
H
H
Mean and standard deviation of each model over 5-year periods are shown in Table 4 and
Table 5. Table 4 Mean calculation of each method over 5-year periods.
Company
Grover
Altman Z
Fulmer
Springate
Zmijewski
INDR
0.295
1.785
9.210
0.686
(1.463)
TRIS
0.689
1.684
11.683
0.897
(1.629)
POLY
(0.509)
0.106
(1.414)
(0.268)
0.982
ARGO
(0.411)
(0.881)
(12.134)
(0.107)
1.315
SRIL
0.041
0.857
9.352
0.313
0.618
POLY
ARGO
ARGO
POLY
ARGO
Least Healthy
(0.509)
(0.881)
(12.134)
(0.268)
1.315
Most Healthy
0.689
1.785
11.683
0.897
(1.629)
TRIS
INDR
TRIS
TRIS
TRIS
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
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Table 5 Standard deviation calculation of each method over 5-year periods.
Company
Grover
Altman Z
Fulmer
Springate
Zmijewski
INDR
0.159
0.214
1.490
0.216
0.433
TRIS
0.179
0.249
0.747
0.205
0.329
POLY
0.043
0.095
1.694
0.071
0.919
ARGO
0.700
2.110
1.987
0.571
2.450
SRIL
2.116
1.768
1.292
2.006
3.258
POLY
POLY
TRIS
POLY
TRIS
Least Volatile
0.043
0.095
0.747
0.071
0.329
Most Volatile
2.116
2.110
1.987
2.006
3.258
SRIL
ARGO
ARGO
SRIL
SRIL
The calculation result above show difference conclusion between models. The
differences can be described as follows.
1. PT Indorama Synthetic Tbk
Year 2021. According to Grover, Fulmer, Springate, and Zmijewski model, the company
is in healthy condition (H), while according to Altman model, the company is in grey area.
Year 2020. According to Grover, Fulmer, and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
Year 2019. According to Grover, Fulmer and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
Year 2018. According to Grover, Fulmer and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
Year 2017. According to Grover, Fulmer and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
2. PT Trisula Textile Industries Tbk
Year 2021. According to Grover, Fulmer, and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
Year 2020. According to Grover, Fulmer, and Zmijewski model, the company is in
healthy condition (H), while according to Altman-Z Score and Springate model, the company
is in financial distress (FD).
Year 2019. According to Grover, Fulmer, Springate and Zmijewski model, the company
is in healthy condition (H), while according to Altman-Z Score model, the company is in grey
area. Year 2018. According to Grover, Fulmer, Springate and Zmijewski model, the company
is in healthy condition (H), while according to Altman-Z Score model, the company is in grey
area. Year 2017. According to Grover, Fulmer, Springate and Zmijewski model, the company
is in healthy condition (H), while according to Altman-Z Score model, the company is in
financial distress (FD).
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
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3. PT Asia Pacific Investamana Tbk
Year 2021. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2020. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2019. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2018. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2017. According to Grover model, Altman-Z Score, and Springate model, the
company is in financial distress (FD), while according to Fulmer and Zmijewski model, the
company is in healthy condition(H).
4. PT Argo Pantes Tbk
Year 2021. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2020. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2019. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
Year 2018. According to Grover model, Zmijewski model, Altman-Z Score, Springate
and Fulmer, the company is in financial distress (FD).
5. PT Sri Rejeki Isman Tbk
Year 2021. According to Fulmer, the company is in Healthy condition, while according
to four other models, Grover and Zmijewski, Altman-Z Score, and Springate the company is
in financial distress (FD).
Year 2020. According to Altman-Z Score the company is in financial distress (FD), while
according to Grover model, Zmijewski model, Springate and Fulmer, the company is in healthy
condition (H).
Year 2019. According to Altman-Z Score the company is in grey area, while according
to Grover model, Zmijewski model, Springate and Fulmer, the company is in healthy condition
(H). Year 2018. According to Altman-Z Score the company is in financial distress (FD), while
according to Grover model, Zmijewski model, Springate and Fulmer, the company is in healthy
condition (H).
Year 2017. According to Altman-Z Score the company is in financial distress (FD), while
according to Grover model, Zmijewski model, Springate and Fulmer, the company is in healthy
condition (H).
CONCLUSION
As explained that the purpose of this study is to recognize signs of financial difficulties
or bankruptcy of a company by using a benchmark formula developed from 5 models related
to financial condition of 5 textile and textile product listed in the Indonesia Stock Exchange
(IDX) for five-year period 2017 – 2021. Based on data and result calculation we can state that
difference models in some instance will produce difference conclusion. But as a whole, there
is similar categories. Basically, it can be said that the entire model can be used to identify signs
of financial distress or bankruptcy.
To Recognize Indication of Financial Distress and Or Bankruptcy of Five Textile Company for Five Years
Period Using Five Financial Distress Models
32 Return: Study of Management, Economic and Bussines , Vol 2 (No 1), Jan 2023
There are two companies that have the same results for year 2017 - 2021 using 5 models
(FD), that are PT Asia Pacific Investama Tbk. and PT Argo Pantes Tbk., except year 2017
where Zmijewski model gives Healthy condition for PT Asia Pacific Investama Tbk
In the case of Indorama, for year 2021, from the five models, it is known that there is 1
different model, that is Fulmer where the results are Healthy (H) conditions, while the other 4
models have results Financial Distress (FD). For year 2018-2020, 4 model have result Healthy
and 1 model have result grey area. For 2017, Grover, Fulmer and Zmijewski have same results
(Healthy), while result for Altman-Z Score is Grey, and result for Springate is FD.
From the computed mean data, the average company health is obtained for a period of 5
years, (a) If using the Grover model, then the company that is experiencing financial distress
is the POLY company, while the company that has the best performance is TRIS, (b) If using
the Altman Z Score model, the company that is experiencing financial distress is the ARGO
company, while the company that has the best performance is INDR, (c) If using the Fulmer
model, then the company that is experiencing financial distress is the ARGO company, while
the company that has the best performance is TRIS. (d) If using the Springate model, then the
company that is experiencing financial distress is the POLY company, while the company that
has the best performance is TRIS. (e) If using the Zmijewski model, then the company that is
experiencing financial distress is the ARGO company, while the company that has the best
performance is TRIS. (f) From the five models used, three models show that the company that
experiences the most financial distress is ARGO, and the other two models are POLY. Four
models show that the company that has the best performance is TRIS, while one model is
INDR.
The standard deviation data obtained shows how volatile the business of the company is
in a 5-year period.(a) If using the Grover model, the most volatile companies are SRIL
companies, while the companies with the lowest volatility are POLY. (b) If using the Altman
Z Score model, the most volatile company is ARGO company, while the company with the
lowest volatility is POLY. (c) If using the Fulmer model, the most volatile company is the
ARGO company, while the company with the lowest volatility is TRIS. (d) If using the
Springate model, the most volatile company is the SRIL company, while the company with the
lowest volatility is POLY. (e) If using the Grover model, the most volatile companies are SRIL
companies, while the companies that have the lowest volatility are TRIS.
From the five models used, three models show that the most volatile company is SRIL,
and the other two models are ARGO. Three models show that the company with the lowest
volatility is POLY, while two models are TRIS.
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