Bankruptcy Prediction Analysis for Indonesian Oil & Gas Company using Altman Z-Score
Aditya Ramadhana Djaja
University of Indonesia
Faculty of Economics and Business
Master of Management
Jl. Salemba Raya No.4, RW.5, Kenari, Kec. Senen, Kota Jakarta Pusat, Daerah Khusus Ibukota Jakarta 10430
Abstract
Globally oil price condition for these past few years has been fluctuate and has reached the lowest level. This condition will effect to oil and gas companies- financial health. This thesis aims to predict the bankruptcy probability of oil and gas companies in Indonesia during period of 2011 – 2017. The observed companies are oil and gas companies that are listed in IDX. Another aim of this thesis is to observe whether the decline in oil price would effect to company-s Z-Score result or not, and to observe which variable that effect the bankruptcy to oil and gas companies. This research uses financial data that obtained from IDX website and company-s website. The result of the research figures out that Z-Score model could predict at least five company will face bankruptcy since 2014 to 2017. In 2011, only two companies that are predicted will be bankrupt. In 2012, there-s only one company will be bankrupt, and in 2013 three companies are predicted to be bankrupt. This research also figures out that the decrease in oil price effects the result of Z-Score for E&P companies as E&P companies revenue relies on oil price in the market. For service companies, the decrease in oil price doesn-t give direct impact except for APEX and BIPI which their line business is providing services for drilling explorations. Companies that has low Z-Score are likely to have negative EBIT, low current assets, and high company-s debt.
Keywords: Bankruptcy Prediction, Z-Score, Oil Price
Topic: Financial Management and Accounting