Assessing financial distress in State-Owned Enterprises: A comparative analysis using Altman Z-Score and Springer S-Score

Abstract

This study aims to evaluate the financial condition of State-Owned Enterprises (SOEs) listed on the official website of the Ministry of SOEs during the 2016–2023 period. SOEs represent government investments that manage essential societal needs. According to Law No. 19 of 2003, SOEs are defined as business entities whose capital is wholly or partially owned by the state through direct contributions from separated state assets. The primary goals of SOEs are to support national economic growth and contribute to state revenue. The research utilizes the Altman Z-Score and Springer S-Score methods to analyze financial distress. The findings reveal that the Altman Z-Score predicts 21 SOEs to be financially stable, 8 SOEs to be financially distressed, and 9 SOEs to be in a "grey area." Meanwhile, the Springer S-Score method predicts 12 SOEs as financially stable. However, several SOEs, including PPLN, KAEF, KRAS, TINS, JSMR, WSKT, PTHK, POST, and KAII, are identified as experiencing financial distress. These results highlight the importance of monitoring financial performance to ensure the sustainability of SOEs.