ANALYSIS OF EFFICIENCY AND FINANCIAL DISTRESS AT SEVERAL MINING STATE OWN ENTERPRISES AND NON STATE OWN ENTERPRISES

Abstract

The purpose of this study is to analysis the financial performance of mining industry in Indonesia, especially related with efficiency and financial distress; in order to examine the recent government regulation about holding strategy. The objectives of this holding strategy are to avoid financial distress and to improve SOE’s efficiency. Mining, oil and gas sector also had a negative liquidity of cash to covering or pay the liabilities. Therefore this study is needed to analyze with the general problem about financial performance, with 2 (two) specification analysis they are Efficiency and Financial Distress. This study is part of descriptive explanatory study and using quantitative data of 4 (four) SOEs and 7 (seven) non-SOE’s from each enterprises annual report; and presents as a comparison study of efficiency and financial distress between SOEs and non- SOEs. This study uses Data Envelopment Analysis (DEA) and Altman Z-Score, to analysis efficiency and financial distress, also with the calculation liquidity of cash to covering liabilities as the strength result of financial distress measurement. The findings show that only INALUM as SOEs mining enterprises reaches efficiency index 1 (one) from 2014-2016, and all mining enterprises in Indonesia experiences in grey zone position and financial distress, in this study also strength the result of financial distress to the calculate liquidity of cash as covering liabilities in two sectors, and the result had conclusion that almost at all in the SOE’s Mining and Non SOE’s Oil and Gas is cannot to covering the liabilities. Due to the analysis results of financial distress and efficiency, this study supports the Indonesian government regulation towards holding strategy SOEs in mining industry.