THE EFFECT OF FINANCIAL RATIOS TO FINANCIAL DISTRESS USING ALTMAN Z SCORE ON HOTEL AND TOURISM COMPANIES LISTED IN INDONESIAN STOCK EXCHANGE

Abstract

Financial Ratios is one of the important factors to measure the health of a company. The purpose of this research is to find out the effects of financial ratios to financial distress Altman z Score. This research conducted by taking 16 samples from hotel and tourism companies listed in Indonesian stock exchange, with the period year from 2015 to 2020 with 102 data observations. The variables used in this research is return on assets (ROA), Debt to equity Ratio (DER), and Current Ratio (CR), and Altman Z score-the result shows that debt to equity ratio has a negative Significant Effect on Z score financial distress method; Return on Asset and Current Ratio has a positive and significant Effect on z score financial distress method. While the three variables show simultaneously affect on financial distress prediction model, through the findings of altmant z score method on hotel and tourism companies listed in Indonesian stock exchange shows the financial condition of companies in the tourism and hotel has worsened of the year especially in the year of 2020 due to covid. The sample is small and consequently, findings may not be generatable to the population.