Predicting financial distress of public and non-public construction sub-sector companies

Abstract

This study examines if there are variations among financial crisis models. It is intended to investigate whether it has the most significant level of accuracy in predicting potential corporate bankruptcies. This is a quantitative study; Secondary information from financial reports serves as the data source. The study population is public and non-public companies in the construction sector listed on the Indonesia Stock Exchange (IDX) for 2014–2020. In order to obtain a sample of eight businesses, targeted selection was used for sampling. The results of this study show that the conditions differ from those of financial distress models for public and non-public companies. For public companies, the most accurate models are Grover and Lavin’s (2001), Karas and Srbová’s (2019), Fulmer’s (1984), and Ohlson’s (1980) models proven to be 100 percent. In contrast, only Fulmer’s model is entirely applicable to non-public companies. Forecast results and best-fit models can provide positive information or warnings for external and internal parties.