*Author Correspondence: Sweetly Mumu,
Hotel, Restaurant and Tourism Industry is one of the potential industries in Indonesia for the country's economic progress and can be a source of regional income. World Health Organization (WHO) established a global emergency status for the Covid-19 virus outbreak in 2020. This has a potential to bring down the industrial companies. They have an opportunity to fall into a prone condition to the financial distress which will lead to bankruptcy. To prevent it, a prediction model can be used to assess the financial ratios, thus the company's financial condition can be known. One of the prediction models is by using the Altman Z-Score method. This study aimed to determine the financial distress analysis using the Altman Z ”-Score method in Trading, Service and Investment Companies in the Restaurant, Hotel and Tourism Sub-Sectors in Indonesia.
This research was a descriptive study using the quantitative methods. The prediction model used was the Altman Z ”-Score method, which was a modification of the Z-Score development that was not used for manufacturing companies. This model used the Z ”-Score formula, “Z-Score = 6,56 X1 + 3,26 X2 + 6,27 X3 + 1,05 X4.
The results showed that three companies in the restaurant, hotel and tourism sector experienced financial distress and were predicted to go bankrupt based on the distress zone category or financial difficulties, they were Bukit Uluwatu Villa for three years (2017-2019), Saraswati Griya Lestari for three years(2017-2019) and Intikeramik Alamasri Industri for one year (2019).
These three companies had problems with the financial ratios, which showed that their financial performance was not healthy and they did not have any improvement for the last three years. The management of the companies which are prone to bankruptcy can take some corrective actions to overcome the financial problems by adopting the benchmarks in this study indicating the negative ratios of the companies.
Financial Distress, Altman Z”-Score
