Financial Health Assessment Model for Listed Companies in Indonesia

Khaira Amalia Fachrudin

2019

Abstract

It is important to conduct financial health assessment to measure company’s health so that corrective action can be taken and it serves as a guide in investment decision. Managers will accordingly be able to detect the factors that may improve company’s financial health. This study, therefore, aims to produce a financial health probability assessment model. The population involved companies listed on the Indonesia Stock Exchange. The target population is all companies experiencing bankruptcy and insolvency in 2018 totalling 23 companies and a total of 23 healthy companies as the comparison. The sample consist of all companies in the target population. The analysis was conducted using logistic regression. The findings further discovered that the profitability ratio was potentially likely to improve the financial health of the company, while the financial leverage ratio was potentially likely to worsen the financial health of the company. The classification accuracy two years prior to the observation year was 93.5%, and the previous year was 95.7%.

Paper Citation

in Harvard Style

Fachrudin K. (2019). Financial Health Assessment Model for Listed Companies in Indonesia. In Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC, ISBN 978-989-758-498-5, pages 127-132. DOI: 10.5220/0009200101270132

in Bibtex Style

@conference{ebic19,
author={Khaira Amalia Fachrudin},
title={Financial Health Assessment Model for Listed Companies in Indonesia},
booktitle={Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,},
year={2019},
pages={127-132},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009200101270132},
isbn={978-989-758-498-5},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Economics and Business International Conference - Volume 1: EBIC,
TI - Financial Health Assessment Model for Listed Companies in Indonesia
SN - 978-989-758-498-5
AU - Fachrudin K.
PY - 2019
SP - 127
EP - 132
DO - 10.5220/0009200101270132