An Analysis of Assessment of Financial Distress in Textile Sector of Pakistan (2012-2018)

Abstract

As business expand in modern global economy, cutthroat competition also becomes a reality. It becomes more important for businesses not only to diversify but also to break through with their respective products on different markets through cost cutting techniques and technologies. For survival and carrying on business activities, an organization should have to manage their finances on priority matters that need utmost care and attention.

The Influence of Financial Performance and Macroeconomic Factors on the Financial Distress of Textile and Garment Companies Listed on the Stock Exchange: Empirical Studies in Indonesia

“…The increase in the TATO ratio shows that the more efficient the company is in managing its assets so that it is increasingly protected from financial difficulties. This is supported by the results of research by Santosa et al (2020), Ramadhan (2021), Khan (2019) which found that activities have a significant negative effect on financial distress. H4: activities have a negative influence on financial distress.…”

“…The more ROA increases, the better the company's condition so that it is increasingly protected from financial distress. The results of research by Nurhamidah (2021), Handayani (2020), Rudiyanto (2021), Mahaningrum (2020), Ramadhan (2021), Dwiantari (2021), Isayas (2021), Khan (2019), Kamaluddin (2019), Balasubramanian (2019) and Waqas (2018) found that profitability has a significant negative effect on financial distress. H1: profitability negatively affects Financial Distress.…”