A Quantitative Study of Oil Price Decrease and Bankruptcy Probability in Oil and Gas Companies
DOI:
https://doi.org/10.21632/irjbs.12.2.145-155Keywords:
Oil Price, Probability of Bankruptcy, Altman Z-ScoreAbstract
The decrease of oil prices globally has an impact on oil and gas company’s 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 using the probability of bankruptcy model of Altman Z-Score. The price of oil is measured by the price of Brent crude. Our sample is made of 20 oil and gas firms listed at the Indonesia Stock Exchange (IDX), the Australian Securities Exchange (ASX) and the Singapore Exchange (SGX) during the period of 2013- 2015 selected through purposive sampling. This study is a quantitative research with secondary data analyzed using simple regression model. The results of this study indicate that oil prices significantly influence the bankruptcy probability of oil and gas companies in Indonesia, Singapore, and Australia.
References
Aizer, A., & Currie, J. (2018). Lead and Juvenile Delinquency: New Evidence from Linked Birth, School and Juvenile Detention Records. The Review of Economics and Statistics. doi:10.1162/rest_a_00814
Altman, E. I. (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance, 23(4), 589–609.
Altman, Edward I. and Iwanicz-Drozdowska, Malgorzata and Laitinen, Erkki K. and Suvas, Arto, (2014). Distressed Firm and Bankruptcy Prediction in an International Context: A Review and Empirical Analysis of Altman’s Z-Score Model (August 10, 2014).
BPH Migas. 2016. Harga BBM di SPBU. Retrieved from http://www.bphmigas.go.id/harga-bbm-di-spbu
Chang, Y., and Wong, J. F. (2003). Oil price fluctuations and Singapore economy. Energy policy, 31(11), 1151-1165.
Colonial First State. (2015). The impact of lower oil prices on Australian equities. Retrieved from http://www3.colonialfirststate.com.au/content/dam/wm/advisers/investments/docs/FS6219.pdf
Deloitte. (2016). The crude downturn for exploration and production companies. Deloitte Center for Energy Solutions. Retrieved
Ghozali, I. (2011). Analisis Multivariate Program IBM SPSS 19. Semarang: Badan Penerbit Universitas Diponogoro.
Hadi, S., and Anggraeni, A. (2008). Pemilihan Prediktor Delisting Terbaik (Perbandingan Antara The Zmijewski Model, The Altman Model, dan The Springate Model). Jurnal Akuntansi and Auditing Indonesia, 12(2).
Hammoudeh, S. M., Ewing, B. T., and Thompson, M. A. (2008). Threshold cointegration analysis of crude oil benchmarks. The Energy Journal, 79-95.
Kesicki, F. (2010). The third oil price surge – What’s different this time? Energy Policy, 38(3), 1596–1606. http://doi.org/10.1016/j.enpol.2009.11.044
Krauss, Clifford. (2016). Oil Prices Explained: Signs of a Modest Revival. The New York Times. Retrieved from http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html
Mitra, S. (2007). Nonaudit Service Fees and Auditor Independence: Empirical Evidence from the Oil and Gas Industry. Journal of Accounting, Auditing & Finance, 22(1), 85–107.
Mohammed, Shariq. 2016. Bankruptcy Prediction by Using the Altman Z-score Model in Oman: A Case Study of Raysut Cement Company SAOG and its subsidiaries, Australasian Accounting, Business and Finance Journal, 10(4), 2016, 70-80.
Nizar, M. A. (2012). Dampak Fluktuasi Harga Minyak Dunia Terhadap Perekonomian Indonesia. Buletin Ilmiah Litbang Perdagangan, 6(2). Retrieved from http://fiskal.depkeu.go.id/2010/adoku/2014kajianpkemCDampakFluktuasiHargaMinyakDunia.pdf
Nunan, Anthony. (2012). Brent Favored Over WTI Oil by U.S. for First Time. Bloomberg. Retrieved from http://www.bloomberg.com/news/articles/2012-12-06/brent-favored-over-wti-by-u-s-for-first-time-as-prices-diverge
Rahmanto, F., Riga, M. H., and Indriana, V. (2016). The Effects of Crude Oil Price Changes on the Indonesian Stock Market: A Sector Investigation. INDONESIAN CAPITAL MARKET REVIEW, 8(1), 12–22.
Witjaksono, A. A. (2010). Analisis Pengaruh Tingkat Suku Bunga SBI, Harga Minyak Dunia, Harga Emas Dunia, Kurs Rupiah, Indeks Nikkei 225, dan Indeks Dow Jones terhadap IHSG (studi kasus pada IHSG di BEI selama periode 2000-2009) Jurnal Bisnis dan Akuntansi, 10(2), 81-90.
The World Bank. (2015). Bank Dunia: Prospek Ekonomi Global Membaik pada 2015, Namun Masih Berisiko. The Wolrd Bank Press Release. Retrieved from http://www.worldbank.org/in/news/press-release/2015/01/13/global-economicprospects-improve-2015-divergent-trends-pose-downside-risk
Downloads
Submitted
Published
How to Cite
Issue
Section
License
Copyright (c) 2019 Dini Rosdini, Rahardi Gita Nautika
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal Author(s) Rights
For IRJBS to publish and disseminate research articles, we need publishing rights (transferred from the author(s) to the publisher). This is determined by a publishing agreement between the Author(s) and IRJBS. This agreement deals with the transfer or license of the copyright of publishing to IRJBS, while Authors still retain significant rights to use and share their own published articles. IRJBS supports the need for authors to share, disseminate and maximize the impact of their research and these rights, in any databases.
As a journal Author, you have rights to many uses of your article, including use by your employing institute or company. These Author rights can be exercised without the need to obtain specific permission. Authors publishing in IRJBS journals have comprehensive rights to use their works for teaching and scholarly purposes without needing to seek permission, including:
- use for classroom teaching by Author or Author's institution and presentation at a meeting or conference and distributing copies to attendees;
- use for internal training by the author's company;
- distribution to colleagues for their research use;
- use in a subsequent compilation of the author's works;
- inclusion in a thesis or dissertation;
- reuse of portions or extracts from the article in other works (with full acknowledgment of the final article);
- preparation of derivative works (other than commercial purposes) (with full acknowledgment of the final article);
- voluntary posting on open websites operated by the author or the author’s institution for scholarly purposes,
(But it should follow the open access license of Creative Common CC-by-SA License).
Authors/Readers/Third Parties can copy and redistribute the material in any medium or format, as well as remix, transform, and build upon the material for any purpose, even commercially. Still, they must give appropriate credit (the name of the creator and attribution parties (authors' detail information), a copyright notice, an open access license notice, a disclaimer notice, and a link to the material), provide a link to the license, and indicate if changes were made (Publisher indicates the modification of the material (if any) and retain an indication of previous modifications.
Authors/Readers/Third Parties can read, print and download, redistribute or republish the article (e.g. display in a repository), translate the article, download for text and data mining purposes, reuse portions or extracts from the article in other works, sell or re-use for commercial purposes, remix, transform, or build upon the material, they must distribute their contributions under the same license as the original Creative Commons Attribution-ShareAlike (CC BY-SA).
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
