ANALYSIS OF COMPANIES FINANCIAL CONDITION USING ALTMAN EM Z-SCORE: A STUDY ON ISLAMIC BANKING IN INDONESIA FOR THE PERIOD OF 2011-2013

DONI, RAHMAD (2015) ANALYSIS OF COMPANIES FINANCIAL CONDITION USING ALTMAN EM Z-SCORE: A STUDY ON ISLAMIC BANKING IN INDONESIA FOR THE PERIOD OF 2011-2013. Diploma thesis, UNIVERSITAS ANDALAS.

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Abstract

The objective of this study is to examine financial condition of Islamic banks in Indonesia (2011-2013) based on Altman EM Z”-Score. The sample of this research consists of 11 observations from Islamic banks in Indonesia (2011-2013). Based on Altman EM Z”- Score bankruptcy prediction model . this research uses 4 ratios that combined to see the difference between healthy companies and the companies that will have problems or bankruptcy. Ratios include : (1) Working capital to total asset ratio, (2) Retained earning to total assets ratio, (3) Earning before interest and taxes to total asset ratio, (4)Book value of equity to book value of debt ratio. The result of this study shows that for 3 consecutive years the value of Altman Z-Score for 2011,2012 and 2013, Islamic banks in Indonesia showed convincing and consistent performance, from the result of EM Z-score for Islamic banks in Indonesia, it was concluded that all Islamic banks stay in the healthy area of the scale

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