Financial Distress Before and During the Covid-19 Pandemic and the Accuracy of the Prediction Model Used

The recent COVID-19 pandemic had inflicted adverse impacts on the lives of throughout the world people, including Indonesia. From the perspective of the business sector, many companies were not spared, especially in terms of their financial performance. Many companies became bankrupt and had to go out of business although there were still some companies which managed to survive with all the limitations. This study was conducted to examine whether there were differences between financial distress conditions before and during the COVID-19 pandemic in primary consumer goods sector companies in Indonesia and to determine which measurement model is more accurate for calculating financial distress. The samples used in this study involved 42 primary consumer goods sector companies listed on the Indonesia Stock Exchange. Data were analyzed using the Wilcoxon Signed Rank test. The result of this study shows that there is no significant difference between financial distress conditions before and during the COVID-19 pandemic. This means that the COVID-19 pandemic will not make companies in the primary consumer goods sector falter because people will still look for primary goods such as food and clothing for their daily needs. People's purchasing power for primary needs remains high despite the pandemic. Springate and Zmijewski are the financial distress measurement models that are considered the most accurate with an accuracy rate of 88.69%. This study is expected to be an input for investors whether investing in consumer goods companies will be profitable or not under various conditions. Future research is expected to be able to test other financial distress measurement models for companies similar to this study or other types of companies.