Prediction Bankruptcy of Retail Company: Based on Financial Ratios and Corporate Governance

Abstract

Aims: The purpose of this study was to determine the effect of financial ratios and corporate governance on the dependent variable, namely financial distress. Financial distress is measured using the Altman Zscore approach in 1995.
 Study Design: The design used in this research is causal research.
 Place and Duration of Study: The object of this research is companies in the retail sector listed on the Indonesia Stock Exchange in 2017-2019. The research sample was 22 samples using the purposive sampling method. So the total data was 66 companies.
 Methodology: The analytical method used is quantitative, namely the approach to data processing through statistical or mathematical methods collected from secondary data. It is hoped that the conclusions obtained in a study will be more measurable and comprehensive.
 Results: The results obtained that the financial ratios proxied through the current ratio and debt-equity ratio influence predicting the bankruptcy of the company, while the Total Assets Turn Over variable, good corporate governance variables such as the number of independent commissioners and the frequency of audit committee meetings are not able to provide an influence in predicting corporate bankruptcy.