OIL PRICE AND BANKRUPTCY PROBABILITY OF OIL AND GAS COMPANIES (STUDIES IN 3 ASIA-PACIFIC COUNTRIES)

Abstrak

The decline in oil prices is not only happen to oil prices in Indonesia, but also world oil prices. The world oil prices downturn has an impact on the  world's oil and gas companies financial health. This study aims to provide empirical evidence about the effect of oil prices on the probability of bankruptcy in Indonesia, Singapore, and Australia.

The probability of bankruptcy in this study is measured by Altman Z-Score, developed by Edward Altman (1968). The price of oil in this study is measured by  the price of Brent crude. The sample was 20 manufacturing firms listed at Indonesia Stock Exchange (IDX), Australian Securities Exchange (ASX) and Singapore Exchange (SGX) during the period 2013-2015 selected through purposive sampling

The results of this study indicate that by using simple regression model, oil prices significantly influence the probability of oil and gas companies in Indonesia, Singapore, and Australia.

Keywords: Oil Price, Probability of Bankruptcy, Altman Z-Score, Purposive Sampling, Simple Regresion Model