Does the Analysis of Altman Z-Score Model, Zmijewski Model, and Springate Model Impact the Financial Distress?

Abstract

Financial distress has a significant impact on the company that will potentially suffer losses, but also investors, creditors, and communities. There are some tools used to detect bankruptcy, namely Altman Z-Score, Zmijewski, and Springate model. This study uses descriptive and verification methodology. The data used are secondary. The data were collected through library research and documentation retrieval from IDX official website. Purposive sampling methodology was employed to select the sample, and it obtained data from eight pharmaceutical companies. The results showed that the mean of Altman Z-Score was 2.99%, the mean of the Zmijewski model was 3.05%, and the mean of Springate was 1.94%. Moreover, the mean of financial distress was 209.90%. Based on the coefficient of determinations results of 0.198, the results showed that the analysis of Altman Z-Score, Zmijewski, and Springate concerning financial distress had a simultaneous impact of 19.8%. The remaining 80.2% was influenced by other variables outside the regression models, including high raw material expenses, poor financial planning, and poor cash flow management.