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Comparative analysis of Z-score, Springate, and Zmijewski models in predicting financial distress conditions

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  • Reni Yendrawati
  • Nafil Adiwafi

    (Department of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia
    Department of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia)

Abstract

This study aims at finding the accuracy level of financial distress prediction on companies in the property, real estate, and building construction sectors. The financial distress prediction models employed here are Z-score, Springate, and Zmijewski. The research population involved all property companies registered at the Indonesian Stock Exchange in the period of 2014-2018. Purposive sampling was used to collect 45 companies. The number of observations taken was 225. The data used were the secondary data taken from the Indonesian Stock Exchange website. The findings showed that the models with high accuracy to predict financial distress in the property, real estate, and building construction sector were the Altman Z-Score model, followed by Zmijewski and Springate models.

Suggested Citation

  • Reni Yendrawati & Nafil Adiwafi, 2020. "Comparative analysis of Z-score, Springate, and Zmijewski models in predicting financial distress conditions," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 2(2), pages 72-80, May.
    • Handle: RePEc:uii:jcauii:v:2:y:2020:i:2:p:72-80
    DOI: 10.20885/jca.vol2.iss2.art2
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    References listed on IDEAS

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    1. Yuni Nustini & Ahmad Rijal Amiruddin, 2019. "Altman Model For Measuring Financial Distress: Comparative Analysis Between Sharia And Conventional Insurance Companies," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(3), pages 161-172, May.
    2. Zmijewski, Me, 1984. "Methodological Issues Related To The Estimation Of Financial Distress Prediction Models," Journal of Accounting Research, Wiley Blackwell, vol. 22, pages 59-82.
    3. Platt, Harlan D. & Platt, Marjorie B., 2006. "Understanding Differences Between Financial Distress and Bankruptcy," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 2(2), pages 1-17.
    4. Yuni Nustini & Ahmad Rijal Amiruddin, 2019. "Altman model for measuring financial distress: Comparative analysis between sharia and conventional insurance companies," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(3), pages 161-172.
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    More about this item

    Keywords

    Altman Z-Score; Springate; Zmijewski; financial distress.;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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