STOCK RETURN PREDICTOR OF INDONESIAN RETAIL INDUSTRY

• Main Author: Perwita Hastari, Deina
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64398
• Institution: Institut Teknologi Bandung

Currently, the closure of retail outlets in Indonesia is a concern for shareholders and companies engaged in the retail industry. Declining profitability is caused by decreasing sales experienced by many retail companies. The continuous decline in profitability can cause the company to go bankrupt. The purpose of this study is to predict the bankruptcy of retail companies with the Altman Z-score method and analyze the effect of bankruptcy risk, company size, book to market, and total asset turnover on retail company returns. The sample in this study was 16 retail companies listed on the Indonesia Stock Exchange selected based on purposive sampling. This study highlights two important findings: (1) based on Altman Z scores, 7 retail companies in healthy condition, 5 retail companies in grey areas, and 4 retail companies in unhealthy conditions. From these results, it can be concluded that the phenomenon of declining sales in retail companies does not cause the retail company's financial condition to decline industrially, (2) based on the results of a linear regression book to market have a significant effect on stock return. Whereas, distress risk, firm size, and total asset turnover do not have a significant effect on stock return