IMPACT OF FINANCIAL DISTRESS ON STOCK PRICE: THE CASE OF PULP & PAPER COMPANIES REGISTERED IN INDONESIA STOCK EXCHANGE
Keywords:Financial distress, stock price, z-score
Cellulose is an organic component that is widely found in wood fibers. Cellulose is the main component in the pulp/paper industry. As in wood, the raw material for pulp contains cellulose fibers. Cellulose is often used and processed to produce various types in the paper industry. Pulp is the primary material for different paper products, ranging from factories’ boards to daily necessities such as paper, tissue, tea bags, and magazines. Meanwhile, paper is a new change in literature and language that has played a significant role in the history of the development of human civilization. The pulp and paper industry in Indonesia provides a reasonably good contribution to the Indonesian economy. Several pulp & paper companies are listed on the Indonesia Stock Exchange. The results of previous studies indicate that several pulp & paper companies are in a stage of financial difficulty. This study aims to prove empirically that the Z-score as a measure of the company's economic challenges affects stock prices. The results showed that the Z-score affected stock prices. From several ratios that make up the Z-score, it is known that the ratio of working capital to total assets, market value of equity to book value of debt, and sales to total assets have a significant effect on stock prices.
Altman, Edward I. 1968a. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” The Journal of Finance 23 (4): 589–609.
———. 1968b. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” The Journal of Finance 23 (4): 589–609. https://doi.org/10.2307/2978933.
———. 2013. “Predicting Financial Distress of Companies: Revisiting the Z-Score and ZETA® Models.” In Edward Elgar Publishing.
Andriawan, Nur Fadli, and Dantje Salean. 2016. “Analisis Metode Altman Z-Score Sebagai Alat Prediksi Kebangkrutan Dan Pengaruhnya Terhadap Harga Saham Pada Perusahaan Farmasi Yang Terdaftar Di Bursa Efek Indonesia.” Jurnal Ekonomi Akuntansi 1 (1): 67–82. https://doi.org/10.30996/jea17.v1i01.650.
Apergis, Nicholas, John Sorros, Panagiotis Artikis, and Vasilios Zisis. 2011. “Bankruptcy Probability and Stock Prices: The Effect of Altman Z-Score Information on Stock Prices Through Panel Data.” Journal of Modern Accounting and Auditing 7 (7): 689–96.
Ardian, Andromeda, and Moh Khoiruddin. 2014. “Pengaruh Analisis Kebangkrutan Model Altman Terhadap Harga Saham Perusahaan Manufaktur.” Management Analysis Journal 3 (1): 1–14. https://doi.org/10.15294/maj.v3i1.3354.
Azis, Musdalifah, Sri Mintarti, and Maryam Nadir. 2015. “Manajemen Investasi: Fundamental, Teknikal, Perilaku Investor Dan Return Saham.” In Manajemen Investasi: Fundamental, Teknikal, Perilaku Investor Dan Return Saham, 445.
Choy, Steven Liew Woon, Jayaraman Munusamy, Shankar Chelliah, and Ally Mandari. 2011. “Effects of Financial Distress Condition on the Company Performance: A Malaysian Perspective.” Review of Economics & Finance 1 (4): 85–99. http://www.bapress.ca/Journal-4/Effects of Financial Distress Condition on the Company Performance-A Malaysian Perspective.pdf.
Endri. 2009. “Prediksi Kebangkrutan Bank Untuk Menghadapi Dan Mengelola Perubahan Lingkungan Bisnis: Analisis Model Altman’s Z-Score.” Perbanas Quarterly Review 2 (1): 34–50.
Endri, and Denny Yerianto. 2019. “Determinants of Bankruptcy Prediction and Implication on Stock Prices in Oil and Gas Mining Sectors in Indonesia Stock Exchange Period 2012-2016.” International Journal of Management Sciences and Business Research 8 (4): 11–17. http://www.ijmsbr.com.
Fama, Eugene F. 1965. “The Behavior of Stock-Market Prices.” The Journal of Business 38 (1): 34–105.
Junaeni, Irawati. 2018. “Stock Prices Predicted by Bankruptcy Condition?” Binus Business Review 9 (2): 105–14. https://doi.org/10.21512/bbr.v9i2.4103.
Kamaludin, and Rini Indriani. 2012. Manajemen Keuangan. Bandung: CV Mandar Maju.
Kurniasih, Augustina, Heliantono, and Agus Herta Sumarto. 2019. “Potential Bankruptcy In Pulp And Paper Companies Listed On Stock Exchange And Its Impact On Stock Prices: The Case Of Indonesia.” International Journal of Business Marketing and Management 4 (9): 1–14. www.ijbmm.com.
Lestari, Setyani Dwi, Retno Fuji Oktaviani, and Willy Arafah. 2016. “Financial Distress Prediction With Altman Z-Score And Effect On Stock Price: Empirical Study On Companies Subsectors Chemical Listed In Indonesia Stock Exchange Period 2009-2014.” International Journal of Business and Management Invention 5 (8): 30–39.
Marcelina, Tri Ayu, and Willy Sri Yuliandhari. 2014. “Prediksi Kebangkrutan Menggunakan Metode Z-Score Dan Pengaruhnya Terhadap Harga Saham Pada Perusahaan Transportasi Yang Terdaftar Di Bursa Efek Indonesia Tahun 2008-2012.” E-Proceeding of Management 1 (3): 291–98.
McCabe, George M. 1979. “The Empirical Relationship Between Investment and Financing: A New Look.” Journal of Financial and Quantitative Analysis 14 (1): 119–35.
Özyeşil, Mustafa. 2020. “A Relationship between Altman’s Z Scores and Stock Price Performance: A Review on Listed Companies in Bist-30 Index.” International Journal of Economics and Management Studies 7 (2): 179–86. https://doi.org/10.14445/23939125/ijems-v7i2p125.
Pratiwi, Irma, Sriwardany, and Ova Novi Irma. 2018. “Pengaruh Potensi Kebangkrutan Terhadap Harga Terdaftar Di Bursa Efek Indonesia.” Jurnal Akuntansi Dan Pembelajaran 7 (2): 87–95.
Radityatama, Muhammad Fachri, and Matrodji H. Mustafa. 2019. “The Effect Of Altman Z-Score Financial Ratio On Stock Price (Study On Go Public Plantation Subsector Companies In Indonesia Stock Exchange).” Dinasti International Journal of Digital Business Management 1 (1): 43–55. https://doi.org/10.31933/DIJDBM.
Ramadhan, Ferry Ardiansyah, and Eni Wuryani. 2018. “Pengaruh Prediksi Kebangkrutan Terhadap Harga Saham Perusahaan.” Jurnal Akuntansi AKUNESA 7 (1): 1–23.
Sukmawati, NI Made Dewi, and I Made Pradana Adiputra. 2014. “Pengaruh Rasio-Rasio Dalam Model Altman Z Score Terhadap Harga Saham (Studi Pada Perusahaan Perbankan Yang Go Public Di Bursa Efek Indonesia).” E-Journal S1 Ak Universitas Pendidikan Ganesha 2 (1): 1–11.
Syamni, Ghazali, M. Shabri Abdul Majid, and Widyana Verawaty Siregar. 2018. “Bankruptcy Prediction Models and Stock Prices of the Coal Mining Industry in Indonesia.” Etikonomi 17 (1): 57–68. https://doi.org/10.15408/etk.v17i1.6559.
Wirto, Wirto, and Matrodji H. Mustafa. 2021. “The Impact From Financial Ratios On Altman Z-Scores’ Model Towards Stocks Return (Study In Automotive Subsectors Companies And Its Components That Listed On Indonesia Stock Exchange).” Dinasti International Journal of Digital Business Management 1 (6): 1070–80.
How to Cite
Copyright (c) 2022 Augustina Kurniasih, Heliantono, Agus Herta Sumarto, Yulia Efni
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.