FINANCIAL PERFORMANCE ANALYSIS OF LISTED COMPANY IN INDONESIA STOCK EXCHANGE ON BASIC MATERIAL AND CONSUMER CYCLICAL SECTOR USING THE ALTMAN Z SCORE METHOD

• Main Author: G K Fitriyadhi Rukman, I
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/63764
• Institution: Institut Teknologi Bandung

dward I. Altman developed the Altman Z score method in 1968 to predict company bankruptcy. Basically this method considers 5 ratios, including profitability, leverage, liquidity, solvency and activity. The pandemic that spread throughout the world in 2020 had an impact on aspects of health, social and economic life. Global economic conditions fell 3% and the Indonesian economy fell 2.07%. The economic crisis also has an impact on companies. The term cyclical industry refers to a type of industry that is dependent on and sensitive to business cycles, meaning that income will be higher when the economy is improving and when the economy is down income will be lower. The Basic Materials and Consumer Cycle Sector is a cyclical industry. This research was conducted to answer the condition of these companies during the pandemic by applying the Altman Z-Score method in the Consumer Cycle industrial sectors during 2016-2020. After finding the results, the researcher found that there are companies that are constantly experiencing financial distress, companies that were previously in the "safe" or "gray" zone in the next period are in the "distress" zone, and companies that were previously in the "distress" zone in the next period is in the "gray" or "safe" zone. The researcher conducted further analysis on the related companies to try to find out what really happened. Based on this research, it is found that there are companies that make the same mistakes, do not improvisation and depend on debt in the capital structure for a long period of time. But apart from that, there are also companies that do the opposite where they do alternative strategies, improvisation and avoid debt habits in the capital structure. In conclusion, a company's financial performance is affected not only by economic factors, but also by management's decisions made within the company.