PREDICTING THE POTENTIAL BANKRUPTCY OF COAL MINING COMPANIES USING ALTMAN Z-SCORE METHOD DURING 2012-2016 PERIOD

Abstract

Purpose of the study: This study aimed to determine and predict potential bankruptcy in coal mining companies listed in Indonesia Stock Exchange (IDX) period 2012-2016.
 Methodology: This study to using the Altman Z-Score method, with five (5) ratios, namely Working Capital to Total Asset, Retained Earnings to Total Assets, Earning before interest and tax to total assets, Market Value of Equity to Book Value of Debt, and Sales to Total Assets. The ratio of working capital to total assets (X1) is a ratio of liquidity which measures the extent of working capital that is used to finance the total assets.
 Main Findings: The result showed, by the Z-Score value in 2016 from the coal mining companies studied, four companies fall in the category of potential bankruptcy, three companies in the grey area, and four in the healthy category.
 Applications of this study: Data sources in this study were coal mining companies listed on the Indonesia Stock Exchange (IDX) for the period 2012-2016.
 Novelty/Originality of this study: There are 11 coal mining companies taken as sample based on purposive sampling. The result shows, by the Z-Score value in 2016 from the coal mining companies studied, four companies fall in the category of potential bankruptcy, three companies in the grey area, and four in the healthy category.