Financial Ratio Analysis as a Prediction Tool of Bankruptcy on Banking Companies Listed in Indonesia Stock Exchange

DOI

10.2991/aebmr.k.200205.033How to use a DOI?

Keywords

bank, bankruptcy, bank financial ratio, logit regression

Abstract

This study aims to analyze the financial ratios of banks to predict bank bankruptcy in Indonesia. Variables used by a number of seven bank financial ratios are CAR, LDR, NPL, BOPO, ROA, ROE and NIM. The research data is obtained by census which means the whole population is used in the research which is 33 banks in year 2018. The analysis tool used is logit regression. The results of the multivariate test showed that the LDR variable had a significant effect on the profitability of bankruptcy of banks in Indonesia at α> 5% but did not have the same sign as predicted. CAR, NPL, BOPO, ROE, and NIM variables have the same mark as the predicted but not significant. The ROA variable is not significant and has a different sign than predicted. In general, the results do not accept all Ha. The accuracy of bank bankruptcy predictions in 2018 amounted to 94.7%. Therefore, the level of errors made in predicting bankruptcy is type II, that is, banks that are predicted to go bankrupt are not bankrupt.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Winda Widyanty
AU  - Dian Primanita Oktasari
PY  - 2020
DA  - 2020/02/12
TI  - Financial Ratio Analysis as a Prediction Tool of Bankruptcy on Banking Companies Listed in Indonesia Stock Exchange
BT  - Proceedings of the 4th International Conference on Management, Economics and Business (ICMEB 2019)
PB  - Atlantis Press
SP  - 180
EP  - 184
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200205.033
DO  - 10.2991/aebmr.k.200205.033
ID  - Widyanty2020
ER  -