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Abstract Background - Bankruptcy is an issue that not only affects the company that is registered as bankrupt, but also the society since it has an impact on the economy. Previous studies have been focusing on larger listed companies outside of Sweden hence there is a lack of empirical findings about Swedish companies in this research area. Small and medium companies represent most of the Sweden's labor force and therefore the bankruptcy issue is important to investigate for these companies. Purpose - The purpose of the thesis is to find out which financial information distinguishes bankrupt from non-bankrupt companies in Sweden. In other words, which financial ratios have predictive power on bankruptcy. Furthermore, the thesis wants to provide knowledge towards current and future companies so that they can avoid bankruptcy by paying attention to the ratios distinguished in the thesis and keeping the ratios at an acceptable level. Method – The thesis conducts the research with a quantitative strategy by observing financial information from companies’ annual reports. The logistic regression model is used to test for the 11 ratios, by matching two samples; bankrupt and non-bankrupt companies, as well as a classification matrix, Pearson correlation matrix and variance inflation factor. The bankrupt companies selected, are classified as bankrupt for the period 2016-2019. The thesis implements a deductive approach to establish expectation and deduct which financial ratios are predictive. Conclusion - The thesis ends up with 92 companies, where 46 are bankrupt and 46 are nonbankrupt. Out of the 11 ratios, three are statistically significant and have predictive power on bankruptcy. These three are; debt rate, gross profit margin and, cash and cash equivalents. The debt rate has a positive effect on bankruptcy, which means that a higher debt rate increases the risk of bankruptcy. Gross profit margin and cash and cash equivalents have a negative effect on bankruptcy; as they increase, the risk of bankruptcy decreases.