The Effect of Liquidity, Profitability, and Bankruptcy Prediction Using the Altman Z-Score Method on Stock Prices of Banking Companie


Authors : Edwardus Emmanuel Susanto; Sri Marti Pramudena

Volume/Issue : Volume 7 - 2022, Issue 8 - August

Google Scholar : https://bit.ly/3IIfn9N

Scribd : https://bit.ly/3LpGN79

DOI : https://doi.org/10.5281/zenodo.7087960

This study aims to determine whether there is a positive effect of liquidity, profitability, and financial distress using the Altman Z-Score method on stock prices. The financial ratios studied are Current Ratio, Return on Equity, Return on Assets, and financial distress as independent variables and stock price as dependent variable. The population used are banking companies listed on the LQ45 Index and take 5 banking companies as samples, namely Central Asia Bank (BBCA), Negara Indonesia Bank (BBNI), Rakyat Indonesia Bank (BBRI), Tabungan Indonesia Bank (BBTN), and Mandiri Bank (BMRI) from 2015 to 2020. This research is qualitative research with a descriptive study approach using secondary data. The statistical method used in this study is the multiple regression method. The results of this study indicate that the variables Current Ratio and Return on Assets have a positive and significant effect on stock prices. While Return on Equity has a negative and significant effect on stock prices and Bankruptcy Predictions have no significant effect on stock prices in banking companies in LQ45

Keywords : Current Ratio, Return on Equity, Return on Assets, Bankruptcy Prediction, Stock price

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