Proceedings of the 1st International Conference on Economics, Management, Accounting and Business, ICEMAB 2018, 8-9 October 2018, Medan, North Sumatra, Indonesia

Research Article

Bankruptcy Prediction By Using The Grover Method

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  • @INPROCEEDINGS{10.4108/eai.8-10-2018.2288689,
        author={Fitriani  Saragih and Elizar  Sinambela and Eka Nurmala Sari},
        title={Bankruptcy Prediction By Using The Grover Method },
        proceedings={Proceedings of the 1st International Conference on Economics, Management, Accounting and Business, ICEMAB 2018, 8-9 October 2018, Medan, North Sumatra, Indonesia},
        publisher={EAI},
        proceedings_a={ICEMAB},
        year={2019},
        month={10},
        keywords={bankruptcy prediction grover method},
        doi={10.4108/eai.8-10-2018.2288689}
    }
    
  • Fitriani Saragih
    Elizar Sinambela
    Eka Nurmala Sari
    Year: 2019
    Bankruptcy Prediction By Using The Grover Method
    ICEMAB
    EAI
    DOI: 10.4108/eai.8-10-2018.2288689
Fitriani Saragih1,*, Elizar Sinambela1, Eka Nurmala Sari1
  • 1: University of Muhammadiyah Sumatera Utara, Jl. Kapten Mukhtar Basri No. 3 Medan, Indonesia
*Contact email: fitrianisaragih@umsu.ac.id

Abstract

This study aimed to determine and analyze prediction of bankruptcy in telecommunication companies listed on the Indonesia Stock Exchange by using the Grover method. The approach of this research was a descriptive approach. The population in this study was telecommunication companies listed on the Indonesia Stock Exchange, namely five companies. The sampling technique in this study was purposive sampling, so that four selected companies were sampled. Data collection technique in this study was documentation technique. The Grover method formula was: 1,650X1 + 3,404X3 - 0,016ROA + 0,057. This study used three financial ratios, including: Working Capital to Total Assets (X1), Earning Before Interest and Tax (X3), and Return On Assets (ROA). The Grover method categorized companies as bankrupt with G-Score was equal to or less than -0.02 (G ≤ -0.02). G-Score for companies which were not bankrupt was equal to or more than 0.01 (G 1 0.01). Companies with G-Score between the upper and lower limits were in the gray area. The findings showed that company that never had a G-Score bankrupt category was PT Telekomunikasi Indonesia Tbk , while companies that had had a G-Score bankrupt category were PT Indosat Tbk from 2013 to 2017, PT Smartfren Telecom Tbk from 2012 to 2017, and PT XL Axiata Tbk from 2015 to 2017. And there had been an increase in the number of companies which were predicted to experience bankruptcy.