Analysis of the Z-Score Model in Predicting Financial Distress and Its Impact on Firm Value
DOI:
https://doi.org/10.35870/emt.v10i3.6895Keywords:
Altman Z-Score, Financial Distress, Value of The Firm, Tobin's QAbstract
This study aims to examine the effect of financial distress, measured using the Altman Z-Score model, on the value of the firm in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2022-2024. The value of the firm is proxied by Tobin's Q ratio. This study uses a quantitative approach with secondary data in the form of annual financial reports. The sampling technique used purposive sampling, resulting in 53 companies with a total of 159 observations. The results show that the Altman Z-Score has a positive and significant effect on the value of the firm. This finding indicates that healthier financial conditions increase investor confidence and the market value of the company. Thus, the Altman Z-Score model is relevant as a tool for predicting financial distress and as a basis for decision-making.
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