ANALYSIS OF Altman Z-SCORE TO PREDICT THE POTENTIAL FOR BANKRUPTCY IN PAN BROTHERS COMPANY, INC THE PERIOD 2006-2010

Rina Dwi Utami

Abstract


Rapid technological developments, high rates of
economic growth and development of complex demand lev-
els resulted in the emergence of a wide range of industries
solely to answer the needs of the community. Many com-
panies are competing to be able to maintain the continuity
of their business. The inability to compete could result in
a decline in protability and debt burden is too much may
cause the company has a potential bankruptcy. Analysis of
Bankruptcy Altman Z-Score, is a tool used to predict the
rate of bankruptcy of a company by calculating the value
of some ratios of Working Capital to Total Assets Ratio,
Retained Earning to Total Assets Ratio, Earning Before In-
terest and Taxes to Total Assets Ratio, Market Value of
Equity to Book Value of Total Liabilities Ratio, Sales to To-
tal Assets Ratio. The purpose of this paper is to nd out
how the change of the ratio Z-score of the ve companies
and to determine the potential bankruptcy of the company
in PT Pan Brothers, Tbk period 2006-2010. The results of
the study showed overall index value generated during the
period 2006-2010 at PT Pan Brothers, Tbk showed good re-
sults where there is less
uctuation reduction and increase
overall value index Z-Score. Year 2006 index Z-score of
3.149, which means the company is in sound nancial con-
dition, then in 2007 the index decreased Z-score reached
2.564, in 2008 the index Z-score decreased again reached
1.916, in 2009-Z index score of 2.403 and in 2010 the index
Z-score has increased until it reaches 2.800. In 2007 to 2010,
the company is in bankruptcy-prone areas. This is due to
a decline in the ratio of Sales to Total Assets Ratio for the
year and the ratio of Earnings Before Interest and Taxes
to Total Assets Ratio negative value in 2008. Management
must be careful in managing the assets of the company's
performance and take corrective action to avoid bankruptcy
company (Grey area). Penamaan File: 21208060

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