Bankruptcies among SME companies, especially in the retail industry, have increased due to factors such as high debt, low liquidity and the impact of macroeconomic crises such as the Corona pandemic and inflation, therefore the study analyzes whether certain financial key ratios can be used to predict bankruptcy risk. The purpose of this study is to analyze whether there is a relationship between financial ratios ROA, ROE, debt ratio and capital turnover rate and bankruptcy in SME companies in retail during 2015-2025. The study uses a quantitative research approach with logistic regression analysis based on data from annual reports of SME retail companies that have gone bankrupt. Trade off theory and the Zmijewski model are two central theories in the study, where trade off theory explains the advantages and disadvantages of debt and emphasizes the importance of balance between equity and debt. Żmijewski is a model for predicting the risk of bankruptcy based on three key ratios such as ROA, debt ratio and liquidity. The study concluded that there is a relationship between ROE, debt-to-equityratio, and capital turnover rate and bankruptcy. However, ROA does not show a significantrelationship with bankruptcy