Estimates Model of Factors Affecting Financial Distress: Evidence from Indonesian State-owned Enterprises

Abstract

This study as a model estimation of factors that influence the financial distress of State-Owned Enterprises. This study contributes to the gap in an earlier study using a logistic model which classifies companies with indicators one for companies experiencing financial distress and a zero for the company is not experiencing financial distress, so it is not possible to do research specifically on one group of firms, for example, companies that experience financial distress. This study uses a marginal approach in measuring financial distress that is proxy with a marginal score with a more realistic and proven mathematics and accounting calculations. For the company's management with state, companies can use these results as a reference in evaluating the achievements of past operating performance, or to formulate strategies and policies in the future of corporate planning in order to achieve the level of marginally better scores or financial distress. This study needs to be continued by using secondary data corresponding realization of audited financial statements, so the result is more realistic and relevant because it uses the data of financial statements that meet the accounting standards.

Determinants of Stock Returns with Liquidity as Moderators: Empirical Study in Indonesia Stock Exchange

“…Theoretical basis used in this study is the agency theory arguing that managers are to achieve the goals set by the shareholders, although each parties, either manager or shareholders have different interests, on one hand one is to maximize compensation/bonus, on the other hand one is to maximize earnings [3].…”

“…Another theory used is signaling theory. The company will give a signal through action and communication [3]. The H2 H3 H4 company adopts the signal in revealing the hidden attributes of stakeholders.…”

“…Accrual-based earnings management is management practices that affect the company's financial statements using accrual transactions [3].…”

Determinants of Stock Returns on the Indonesian Stock Exchange

“…Theoretical basis used in this study is the agency theory developed by Jensen and Meckling as in Assagaf, et al [2] arguing that this theory explains the two parties have different interests, namely the shareholders or principals who want to maximize dividend income or earnings per share, while managers of companies who want to maximize the receipt of compensation. Managers can manage the company to achieve the desired goals of shareholders and managers will be paid a decent amount of compensation to be motivated in carrying out its duties and responsibilities.…”

“…Melewar and Tucker (2005) as in Assagaf, et al [2] suggests that the signaling theory shows that the company will give a signal through action and communication. The company adopts the signal in revealing the hidden attributes of stakeholders.…”