Financial and Macroeconomic Ratio Analysis Against Financial Distress
DOI:
https://doi.org/10.22441/jimb.v11i1.26098Keywords:
Financial Distress, Profitability Ratios, Leverage Ratios, Liquidity Ratios, Activity RatiosAbstract
This study aims to analyze the effect of financial ratios and macroeconomic factors on financial distress in trade, service and investment sector companies during the 2018-2021 period. The sampling method used a purposive sampling technique with a total sample of 58 companies. Testing was carried out using E-Views using the panel data regression analysis method. Financial distress is measured using the Altman Z-Score where the higher the value indicates the healthier the company. The results showed that the profitability ratios as measured by Return on Assets had a significant positive effect on financial distress. That is, the higher the Return on Assets, the healthier the company's finances. The leverage ratio as measured by the Debt-to-Equity Ratio has no significant effect on financial distress. The liquidity ratio as measured by the Current Ratio has a significant positive effect on financial distress. In addition, the activity ratio as measured by Total Asset Turnover has a significant negative effect on financial distress. That is, the higher the total asset turnover of a company, the more un-healthy the company's financial condition will be. The inflation variable as measured by the Consumer Price Index has no significant effect on financial distress in companies in the trade, service and investment sectors during the 2018-2021 period.Downloads
References
Acosta-Gonzalez, G., Ouseph, M., Lombardo, K., Lu, S., & Glickman, J. (2019). Immune environment in serrated lesions of the colon: intraepithelial lymphocyte density, PD-1, and PD-L1 expression correlate with serrated neoplasia pathway progression. Human Pathology , 83 , 115–123.
Aisyah, Jaenudin, R., & Koryati, D. (2017). Analysis of factors causing low student learning outcomes in economics subjects at SMA Negeri 15 Palembang . Profit Journal , 4 (1), 1–11.
Aisyah, NN, Kristanti, FT, & Zultilisna, D. (2017). The Influence of Liquidity Ratios, Activity Ratios, Profitability Ratios, and Leverage Ratios on Financial Distress. E-Proceedings of Management, 4 (1), 411–419.
Andriansyah, MZ (2018). The Influence of Liquidity Ratios, Leverage, Profitability, Activity and Sales Growth in Predicting Financial Distress (Empirical Study of Property and Real Estate Sub-Sector Companies Listed on the IDX for the 2011-2017 Period). Indonesian Islamic University.
Ardi, MFS, Desmintari, & Yetty, F. (2020). Analysis of Financial Performance Against Financial Distress in Textile and Garment Companies on the IDX . Scientific Journal of Unitary Accounting, 8 (3), 309–318.
Ariyanti, S. (2016). THE EFFECT OF PROFITABILITY AND LEVERAGE ON STOCK PRICES (Study of Construction and Building Companies Listed on the Indonesian Stock Exchange for the 2011-2014 Period). Journal of Business Administration (JAB), 35 (2), 181–188.
Asfali, I. (2019). The Influence of Profitability, Liquidity, Leverage, Activity, Sales Growth on Financial Distress of Chemical Companies. Journal of Economics And Management, 20 (2), 56–66.
Azanella, LA, & Nugroho, RS (2021). Shopee's explanation regarding SPayLater bills that have risen from IDR 400,000 to IDR 17 million. Kompas.Com. https://www.kompas.com/tren/read/2021/07/13/094050765/penjauhan-shopee-soal-tagihan-spaylater-yang-membengkak-dari-rp-400000?page=2
Bahrun, MF, Tifah, T., & Firmansyah, A. (2020). The Influence of Funding Decisions, Investment Decisions, Dividend Policy, and Free Cash Flow on Company Value. Scientific Journal of Unitary Accounting, 8 (3), 263–276. https://doi.org/10.37641/jiakes.v8i3.358
Bank Indonesia. (2021). Bank Indonesia. BI. https://www.bi.go.id/id/default.aspx
Damajanti, A., Wulandari, H., & Rosyati, R. (2021). The Influence of Financial Ratios on Financial Distress in Retail Trading Sector Companies on the Indonesian Stock Exchange 2015-2018. Solutions: Scientific Journal of Economics, 19 (1), 29–44. https://doi.org/10.26623/slsi.v19i1.2998
Farida, M., & Darmawan, A. (2017). The Influence of Inflation Risk, Interest Rate Risk, Foreign Exchange Risk, and Profitability on Stock Returns. Journal of Business Administration, 51 (1).
Ghozali, I. (2019). Multivariate Analysis Applications. Diponegoro University.
Hendrawan, Y., Moorcy, NH, Santoso, AW, & Sukimin. (2022). The Influence of Macroeconomic Indicators and Financial Performance on Financial Distress in Mining Sector Companies Listed on the Indonesian Stock Exchange. Journal of GeoEconomics, 13 (2), 195–210. https://doi.org/10.36277/geoeconomics.v13i2.207
Khoja, L., Chipulu, M., & Jayasekera, R. (2019). Analysis of financial distress across countries: Using macroeconomic, industrial indicators and accounting data. International Review of Financial Analysis, 66 . https://doi.org/10.1016/j.irfa.2019.101379
Kurniawan, AW, & Puspitaningtyas, Z. (2016). Quantitative Research Methods . Pandiva Books.
Kusnandar, VB (2022). The National Food and Beverage Industry is Starting to Recover from the Covid-19 Pandemic. Databox. https://databoks.katadata.co.id/datapublish/2022/03/31/industri-makanan-dan-minuman-nasional-mulai-bangkit-dari-pandemi-covid-19
Mahtani, US, & Garg, C. P. (2018). An analysis of key factors of financial distress in airline companies in India using fuzzy AHP framework. Transportation Research Part A: Policy and Practice, 117 (May 2018), 87–102. https://doi.org/10.1016/j.tra.2018.08.016
Masdupi, E., Tasman, A., & Davista, A. (2018). The Influence of Liquidity, Leverage and Profitability on Financial Distress of Listed Manufacturing Companies in Indonesia. 57 (Piceeba), 223–228. https://doi.org/10.2991/piceeba-18.2018.51
Mulkarim, AI, Amboningtyas, D., & Paramit, PD (2019). ANALYSIS OF FINANCIAL DISTRESS PREDICTION SHARIA BANKING USING ALTMAN, SPRINGATE, AND ZMIJEWSKI METHODS (Case Study On Sharia Commercial Banks In Indonesia Registered At OJK for 2013-2017). Journal of Management, 5 (5), 1–13.
Muwidha, M., & Indrawan, I. (2020). Analysis of Financial Distress Predictions Based on Financial Performance and Economic Factors in Companies that are Members of the Jakarta Islamic Index (Jii). Adbis: Journal of Administration and Business, 14 (2), 146–160. https://doi.org/10.33795/j- adbis.v14i2.101
Nurmala, MD, Afrizal, S., & Wibowo, TUSH (2022). The Impact of Using the TikTok Application on Changes in Student Social Behavior. Hermeneutics, 8 (1), 1–12.
Nurriadianis, S., & Adi, SW (2019). Proceedings of National Seminar & Call For Papers Surakarta. Proceedings of the National Seminar & Call for Paper STIE AAS , September, 189–200.
Priyatnasari, S., & Hartono, U. (2019). FINANCIAL RATIO, MACROECONOMICS AND FINANCIAL DISTRESS: A STUDY OF TRADE, SERVICE AND INVESTMENT COMPANIES IN INDONESIA. Journal of Management Science, 7 (4), 1005–1016.
Putri, S., & Harun, E. (2022). ANALYSIS OF FINANCIAL STATEMENTS AS EVIDENCE OF PERFORMANCE MEASUREMENT AT PT GOTO GOJEK TOKOPEDIA TBK IN 2021. VALUE, 3 (1). https://doi.org/10.36490/value.v3i1.359
Sandi, TK, & Amanah, L. (2019). The Influence of Financial Performance and Macroeconomic Variables on Financial Distress. Journal of Accounting Science and Research, 8 (6), 1–18.
Saputra, AJ, & Salim, S. (2020). THE INFLUENCE OF PROFITABILITY, LEVERAGE, FIRM SIZE, AND SALES GROWTH ON FINANCIAL DISTRESS . 2(1), 262–269.
Simanjuntak, C., Titi, F., & Aminah, W. (2017). THE INFLUENCE OF FINANCIAL RATIO ON FINANCIAL DISTRESS (STUDY IN TRANSPORTATION COMPANIES ON LISTED IN INDONESIA STOCK EXCHANGE DURING 2011-2015). E-Proceeding of Management, 4 (2), 1580–1587.
Sugiyono. (2019). Combination Research Methods (Mixed Methods). Alphabet.
Suprihatin, NS, & Giftilora, M. (2020). Use of Profits, Cash Flow and Leverage in Predicting Financial Distress. JAD: Dewantara Accounting & Finance Research Journal, 3 (2), 141–152. https://doi.org/10.26533/jad.v3i2.694
Wafi, A., Ariadi, H., Muqsith, A., & Madusari, BD (2021). Business feasibility of intensive vaname shrimp (Litopenaeus vannamei) with non-partial system. ECSOFiM (Economic and Social of Fisheries and Marine Journal), 8 (2), 226–238.
Yusbardini, Y., & Rashid, R. (2019). Predicting Financial Distress Using the Altman Approach in Manufacturing Companies in Indonesia. Estuary Journal of Economics and Business, 3 (1), 122. https://doi.org/10.24912/jmieb.v3i1.3543
Zulaecha, HE, & Mulvitasari, A. (2019). The Influence of Liquidity, Leverage, and Sales Growth on Financial Distress. JMB: Journal of Management And Business, 8 (1), 16–23. https://doi.org/10.31000/jmb.v8i1.1573
Downloads
Additional Files
Published
How to Cite
Issue
Section
License
The copyright of this article was transferred to Universitas Mercu Buana if and when the article was accepted for publication. The undersigned below transfers all and all rights in and to paper including without limitation all copyright to UMB. The undersigned states and guarantees that the paper is genuine and that he is the author of the paper, except material that is clearly identified as the original source, with the notification of the permission of the copyright owner if necessary and has the power and authority to make and carry out this assignment. We state that this paper has not been published in the same form elsewhere.
Furthermore, I / We hereby transfer unlimited publicity rights to the above mentioned papers as a whole to Universitas Mercu Buana. Copyright transfers include the right to reproduce and distribute articles, including reprints, translations, photo reproductions, microforms, electronic forms (offline, online) or other reproductions that have similar properties. The appropriate author signs and accepts the responsibility for releasing this material on behalf of each and all co-authors. This agreement must be signed by at least one of the authors who has obtained approval from the co-author (s) where applicable.
After the submission of this agreement is signed by the appropriate author, changes in authorship or in the order of the registered author will not be accepted. Retained Rights / Provisions and Conditions Although the author is permitted to reuse all or part of the Work in another work, this does not include giving a third party request for reprinting, republishing, or any other type of reuse.
