ANALISIS TINGKAT FINANCIAL DISTRESS DENGAN MODEL ALTMAN Z-SCORE DAN PENGARUHNYA TERHADAP HARGA SAHAM (Studi Pada Perusahaan Asuransi di Bursa Efek Indonesia)

Abstract

Financial distress is a decline in financial conditions that occurs before bankruptcy or liquidation. Investors certainly do not want to invest in companies experiencing financial distress. Investors in companies experiencing financial distress tend to choose to sell their shares. This study is intended to analyze the level of financial distress with the Altman Z-score model and examine its effect on stock prices. The study was conducted on insurance companies on the Indonesia Stock Exchange during the 2015-2019 period, amounting to 11 companies. The sample was determined by purposive sampling technique. Altman Z-score model is used to determine the level of financial distress. The effect of the level of financial distress on stock prices was tested using a simple linear regression analysis technique. With the Altman Z-score model, it can be identified the level of financial distress experienced by insurance companies during 2015-2019, namely 6 companies remain in the safe zone, 4 companies have been in the gray zone and 1 company has been in the distress zone. The results of simple linear regression analysis show that the level of financial distress has a negative and significant effect on stock prices. Investors are advised to conduct financial distress analysis in making investment decisions. Keywords: Financial distress, Altman z-score, Stock Price