BANKRUPTCY ANALYSIS OF PT. SRITEX USING ALTMAN Z-SCORE, AND ZMIJEWSKI: A CASE STUDY

Abstract

This study examines the financial distress condition of PT. Sri Rejeki Isman Tbk (PT. Sritex) prior to its bankruptcy declaration in 2024, focusing on the period 2018–2023. The analysis employs two widely recognized bankruptcy prediction models, namely the Altman Z-Score and the Zmijewski model. Results indicate that the Altman Z-Score placed PT. Sritex in the grey area during the early years, with the condition deteriorating into financial distress from 2021 to 2023. The Zmijewski model presented a similar pattern, classifying the company as financially healthy at first, but signaling financial distress starting in 2021 and continuing until 2023. The consistency between both models suggests that financial difficulties had emerged several years before the official bankruptcy, indicating that preventive measures could have been taken earlier. The findings highlight the importance of applying multiple prediction models to provide a more comprehensive assessment of a company’s financial health. For practitioners and stakeholders, this approach offers earlier detection of potential distress, enabling timely strategic responses. Moreover, the case of PT. Sritex illustrates how macroeconomic pressures, operational inefficiencies, and declining market conditions can accelerate a company’s path toward bankruptcy. This underscores the need for continuous financial monitoring and proactive risk management in order to mitigate potential crises and sustain business continuity.