Proceedings of the 4th International Conference on Management, Economics and Business (ICMEB 2019)

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

Authors
Winda Widyanty, Dian Primanita Oktasari
Corresponding Author
Winda Widyanty
Available Online 12 February 2020.
DOI
https://doi.org/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.
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Proceedings
4th International Conference on Management, Economics and Business (ICMEB 2019)
Part of series
Advances in Economics, Business and Management Research
Publication Date
12 February 2020
ISBN
978-94-6252-903-8
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.200205.033How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

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  - 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  - https://doi.org/10.2991/aebmr.k.200205.033
ID  - Widyanty2020
ER  -