ANALYSIS OF FINANCIAL RATIO AND FINANCIAL DISTRESS: A CASE STUDY ON CONSTRUCTION SERVICES COMPANIES
Lies Zulfiati, G. Erni Yanti Anugrah Sagala
Sekolah Tinggi Ilmu Ekonomi Indonesia
Abstract
This study aims to determine the indications of financial distress in the construction services companies. This study employed a descriptive method. A descriptive study is conducted to discover the value of either one or more independent variables without comparing or linking them with other variables. The sample in this study is financial statements from 2010 to 2018, during which period the construction services companies constantly experienced declining profitability. To predict financial distress in the construction services companies, the financial ratio data of 2010-2018 are analyzed using the Altman Z-score method. The findings of this study describe the prediction of financial distress in the construction services companies in 2010-2018. In 2011, no financial distress (bankruptcy) is discovered. However, in 2010, followed by 2012 to 2018, potential bankruptcy is discovered, such as decline in sales, assets, profits, and others.
Keywords: financial ratio, financial distress
Topic: Organizational and accounting system change