An Analysis Of Financial Ratios To Predict Financial Distress Of Manufacturing Companies Listed On Indonesian Stock Exchange (IDX)

Abstract

Nur Hafid (2011). An Analysis Of Financial Ratios To Predict Financial Distress Of Manufacturing Companies Listed On Indonesian Stock Exchange (IDX). Yogyakarta, International Program, Universitas Islam Indonesia. This research aims to analyze the ability of financial ratios to predict financial distress of the manufacturing companies listed on Indonesian Stock Exchange (IDX). For this reason, researcher uses three Altman models which are First Altman Model, Altman Revised Model, and Altman New Model. This study makes use of the data from 24 companies listed on Indonesia Stock Exchange for the period 2008 to 2010 by purposive random sampling. The companies object divided into two groups. First, Non-Bankrupt group is the manufacturing companies listed on LQ45 Indonesian Stock Exchange. Second, Bankrupt group is the manufacturing companies categorized as Top 20 Losers and delisting companies in Indonesian Stock Exchange. The descriptive research method is used here to describe the data and the research findings. The result shows that all of Altman model can be used to predict financial distress of manufacturing companies. From the three models, Altman Revised Model is the model that has higher accuracy to predict bankruptcy of manufacturing companies. Keyword: Financial ratio, Prediction, Bankruptcy, Financial distress, Indonesia Stock Exchange, First Altman Model, Altman Revised Model, and Altman New Model.