Analysis of PT Wijaya Karya (Persero) Tbk's Bankruptcy Prediction Using the Altman Z-Score Model: Empirical Evidence for the Period 2020–2023

Abstract

This study analyzes the bankruptcy prediction of PT Wijaya Karya (Persero) Tbk, a state-owned infrastructure and construction company, using the Altman Z-Score model for the 2020-2023 period. The company experienced a significant financial decline, recording a net loss of IDR 7.13 trillion in 2023. This research aims to evaluate the financial health of companies and predict potential bankruptcy risks. This methodology uses the Altman Z-Score formula which combines five financial ratios: working capital to total assets, retained earnings to total assets, earnings before interest and taxes to total assets, equity market value to total book value of liabilities, and sales to total assets. Financial statement data is obtained from annual and quarterly reports published by the Indonesia Stock Exchange. The findings revealed that WIKA's Z-Score deteriorated from 1.89 in Q1 2022 to 0.68 in 2023, consistently being in the distress zone (Z < 1.81), indicating a high risk of bankruptcy. The decline in financial performance was mainly driven by large operating losses, negative retained earnings, weak profitability ratios, and declining asset turnover efficiency. The study provides empirical evidence on financial difficulties in Indonesia's construction sector and offers implications for stakeholders regarding early warning signals of corporate financial difficulties.