This study aims to obtain empirical evidence that: 1) current financial ratio information is useful in predicting future corporate financial distress, 2) family firms, CEO turnover, and auditor changes (KAP turnover) moderate the role of current financial ratios in predicting financial distress, and 3) to develop a financial distress prediction model with superior accuracy compared to the Altman Z-score and MFA score. The research sample consists of 120 manufacturing companies listed on the Indonesia Stock Exchange (BEI) from 2013-2022. This study employs discriminant analysis and moderated regression analysis (MRA). The findings reveal that: 1) current financial ratio information is useful in predicting future corporate financial distress, 2) family firms, CEO turnover, and auditor changes can moderate the role of current financial ratios in predicting corporate financial distress, and 3) the new model outperforms the Altman Z-score and MFA score. The research produces two models, Z Indonesia score Model 1 (Z1 Indonesia score) and Model 2 (Z2 Indonesia score), each can predict up to three years before the occurrence of financial distress and has a superior prediction accuracy rate compared to the Altman and MFA score models. The models are validated through bond ratings by PEFINDO and company status in the District Court, showing accurate and consistent results. This study provides new insights for policymakers to assess and monitor financial health, thereby preventing future financial crises. The model also aids investors and managers in making more informative and strategic decisions regarding the financial health of companies.
