Altman Z-Score Bankruptcy Prediction in Food and Staple Retail Sector

Abstract

This research investigates bankruptcy potential within Indonesia's food and staple retail sector using the Altman Z-Score methodology. Analyzing nine companies listed on the Indonesia Stock Exchange during 2020-2023, findings reveal that two firms—Hero Supermarket Tbk and Matahari Putra Prima Tbk—demonstrate severe financial distress with Z-Scores ≤1.81. Hero Supermarket Tbk exhibited the most critical condition, showing consistently declining Z-scores accompanied by negative profitability and liquidity ratios across four consecutive years. Matahari Putra Prima Tbk similarly fluctuated within the distressed zone throughout the observation period. Results underscore the necessity for continuous financial performance monitoring and proactive management interventions to mitigate bankruptcy risks. These findings offer practical advice to stakeholders regarding financial health assessment and early warning system implementation in retail operations.