#TITLE_ALTERNATIVE#

• Main Author: ANDRINY (NIM 19005022), KANIA
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/10749
• Institution: Institut Teknologi Bandung

Nowadays business is headed in the high competition in Indonesia. Many aspects, internal management that control the company and external investor that looking for the profitable investment apply methods in predict the condition of financial company. Many theories exist to predict the financial distress of company. Edward I Altman (1966) made a methodology in predict the financial failure of company by providing Z score as the criterion with USA market as a scope of research. He combines five ratios with weight to calculating the Z score. With three area of financial condition, Altman state that Z score could predict the bankruptcy in company.<p> <br /> <br /> The result of this research is not exactly same as Altman did. Altman found the bankruptcy indicator from his sample in USA market. However, in Indonesia the result is most likely same. The Z score of delisted companies shows in lower value compared by Z score of LQ45 companies. Z score are in same result with Altman research based on the claimed of delisted companies that mostly remove from market according its financial problem and LQ45 companies that be listed because the good financial performance.<p> <br /> <br /> In the end of this paper, the results Z score by Altman could be apply as one of methodology in predicts the company's condition in investment for the investor and as warnings for management and stakeholders in control their financial condition of companies. While the Z score not the only analysis to take the decision. The Z score as standard of company development makes the company will encourage running their businesses aggressively to reach the high Z score. The result also suggests that average LQ45 companies have good company’s condition to be picked as investment to the investor, which is also, has good fundamental analysis.