ANALYSIS AND FORECASTING OF BANKRUPTCY POTENTIAL USING MULTIPLE DISCRIMINANT ANALYSIS AND DOUBLE MOVING AVERAGE ON PT. BAKRIE TELECOM, Tbk YEAR 2013.
ANALYSIS AND FORECASTING OF BANKRUPTCY POTENTIAL USING MULTIPLE DISCRIMINANT ANALYSIS AND DOUBLE MOVING AVERAGE ON PT. BAKRIE TELECOM, Tbk YEAR 2013.
Author : NORITA Published on : International Conference in Organization Innovation (ICOI) 2014 (De La Salle University- Philippines)
Abstract
“Due to increasingly tougher business competition, many corporates improve their business more intensively. The improvements include improvement of product quality, service quality for their performance improvement. Future corporates should really be able to compete both in regional and global markets. Corporates that unable to compete and maintain its performance will be eliminated from the industrial environment and will ultimately go bankrupt.
Altman’s Z-Score is a statistical model that uses the multiple discriminant analysis (MDA) technique to forecast the potential of bankruptcy. Forecasting of bankruptcy potential can be done using a moving average with averaging of 3-year, 4-year or 5 years, depending on the period under study.
The purpose of this study was to determine how the bankruptcy potential of PT. Bakrie Telecom, Tbk as one of the telecom operators in the period 2005-2012 using multiple discriminant analysis. This study also aims to forecast the bankruptcy potential of the corporate for the year 2013 using double moving average with averaging of 3-year and 4-year.
The results showed that during the period 2005-2012 PT. Bakrie Telecom, Tbk is in the zone of collapse because the Z???-Score obtained was < 1.10; except in 2006 and 2008, the corporate is in the gray zone because of Z???-Score obtained was in the range of 1.10 to 2.60. Further forecastings of Z???-Score for the year 2013 using double moving average with 3-years averaging is equal to (5.71) and with 4-year averaging is equal to (4.56). The level of forecasting error (mean absolute percentage error) with a 3-year averaging is 1.00% and for the 4-year averaging is 4.43%. Thus to forecast bankruptcy in 2013 double moving average with 3-year averaging was selected because the error rate is smaller than the 4-year averaging. The accuracy of bankruptcy forecasting of PT. Bakrie Telecom, Tbk using double moving average averaging 3-year 2010-2012 was averaged at 51.10%; while the accuracy of bankruptcy forecasting for the year 2012 was averaged at 78.11%.
To avoid bankruptcy, corporate should be more intensively and earnestly carry out products and services improvement in order to improve their financial performance amid increasingly fierce competition between telecom operators in order to preserve the interests of all stakeholders."
