Financial Distress Prediction: The Role of Financial Ratio and Firm Size

Ramadani, Atika Widyo; Ratmono, Dwi

doi:10.23969/jrak.v15i1.6428

Cited by 4 publications

(4 citation statements)

References 35 publications

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“…The moderation regression test's findings show that the company's size has no bearing on the relationship between financial difficulty and the DAR. This research is not in line with Ramadani and Ratmono (2023) which states that company size as a moderating variable can strengthen DAR on financial distress. However, on the other hand, it also contradicts the results of Junior and Wijaya (2022) which state that company size weakens DAR on financial distress.…”

Section: Conclusion and Discussioncontrasting

confidence: 85%

“…On the other hand, having a high overall asset base will make it simpler to develop the business sector, which will ultimately increase the performance of the organization. Company size which acts as a moderating variable, indicates that there is a stronger relationship between the DAR and financial distress (Ramadani & Ratmono, 2023). Based on the description, which explains the relationship between the independent variable and the dependent variable, it can be described in Figure 2:…”

Section: Empirical Overview and Hypothesis Developmentmentioning

confidence: 99%

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Some Factors Affecting Financial Distress in Telecommunication Companies in Southeast Asia

Kristanti,

Pancawitri

2024

Business: Theory and Practice

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People who have lost their jobs are affected by the Covid-19 epidemic, which lowers demand and prevents them from updating daily used internet services. A company’s deteriorating financial health may be a warning indication of impending financial trouble. With company size serving as a moderating variable, the purpose of this study is to ascertain the impact of earnings management, corporate strategy, the board of directors, and debt asset ratio on financial distress. Ten telecoms businesses in Southeast Asia were the result of the purposive sampling technique from 2013 to 2022. Both logistic regression and moderated regression analysis are used in this study. These findings show how financial hardship simultaneously affects management of earnings, corporate strategy, the board of directors, and the debt asset ratio. However, financial distress is partially impacted negatively by the factors debt asset ratio, board of directors, and earnings management. The business strategy variable is now untouched by financial difficulties. Financial distress is not significantly impacted by company size, which moderating the debt asset ratio from the regression analysis.

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Section: Conclusion and Discussioncontrasting

confidence: 85%

Section: Empirical Overview and Hypothesis Developmentmentioning

confidence: 99%

Some Factors Affecting Financial Distress in Telecommunication Companies in Southeast Asia

Kristanti,

Pancawitri

2024

Business: Theory and Practice

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“…The results of the ordinal logistic regression analysis showed that free cash flow had a significant effect on financial distress. Ramadani and Ratmono (2023) tested financial ratios in predicting financial distress moderated by firm size using a sample of 128 manufacturing companies listed on the Indonesia Stock Exchange from 2018 to 2020. The study employed the Structural Equation Model based on Partial Least Square (SEM-PLS) analysis with SmartPLS 3.0.…”

Section: Empirical Reviewmentioning

confidence: 99%

Cash Flow Ratios and Business Failure of Healthcare Firms in Nigeria

Okeke,

Nwoha,

Duru

2024

IJBMR

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The study examined cash flow ratios as predictors of business failure of healthcare firms in Nigeria. The objectives of the study were to ascertain the effect of operating cash flow ratio, cash flow to debt ratio, and price to cash flow ratio on Altman’s zeta score of healthcare firms in Nigeria. The study adopted ex-post-facto research design, covering a period of 10 years (from 2013 to 2022). Secondary data used for the study were extracted from annual reports and accounts of selected healthcare firms listed on the Nigeria Exchange Group (NGX) from 2013 to 2022. Multiple regression technique was used to test the hypotheses. The result of the test of hypotheses revealed that the operating cash flow ratio has a statistically non-significant negative effect on the Altman z-score of healthcare firms in Nigeria (p-value = 0.3397). The finding also indicates that the cash flow to debt ratio has a statistically non-significant negative effect on the Altman z-score of healthcare firms in Nigeria (p-value = 0.2937). Lastly, the finding reveals that the price to cash flow ratio has a non-significant positive effect on the Altman z-score of healthcare firms in Nigeria (p-value = 0.5281). The policy implications of these findings suggest that when assessing the financial health and bankruptcy risk of healthcare firms in Nigeria, policymakers and regulators should consider factors beyond cash flow ratios. It was recommended therefore that healthcare firms in Nigeria should diversify their sources of cash flow beyond operating cash flow to improve financial stability and mitigate bankruptcy risk. Healthcare firms should have a careful evaluation of debt management practices is necessary to maintain a healthy balance between cash flow generation and debt obligations in healthcare firms. Market sentiment reflected in the price to cash flow ratio should not be relied upon as the sole indicator of financial stability. Healthcare firms should prioritize fundamental financial and operational indicators to assess their financial health and mitigate bankruptcy risk.

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“…The term company size refers to an organization's size as determined by its total assets, total sales, and total profit, which impacts its social performance and results in achieving its corporate objectives (Giannarakis et al, 2022;Ramadani & Ratmono, 2023). Investors analyze company size before making investment decisions which is the more assets a corporation owns, the larger that company (Block et al, 2019;Nurwulan & Maulida, 2023).…”

Section: Introductionmentioning

confidence: 99%

Analysis of Solvability, Liquidity, and Company Size on Audit Delay With Audit Quality as Moderation

Karina,

Kusumawardhani

2023

JRAK

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Delays in submitting financial reports are caused by the length of audit delay, of which there are various internal and external factors that affect audit delay. This study aimed to examine the direct and indirect effects of internal and external factor on audit delay use a moderating variable. The SEM-PLS technique was used to analyze data from 105 financial statements of 105 mining companies listed on the IDX from 2017-2021 based on purposive sampling with various criteria. The result showed that liquidity, solvency, company size, and audit quality significantly affect audit delays. Other result, audit quality can moderate the impact of solvency and firm size on audit delay but cannot moderate liquidity. The implications of this research for mining companies are to focus on financial performance because it can affect the length of audit delay, which will determine the good and bad assessment of a company.

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Financial Distress Prediction: The Role of Financial Ratio and Firm Size

Cited by 4 publications

References 35 publications

Some Factors Affecting Financial Distress in Telecommunication Companies in Southeast Asia

Some Factors Affecting Financial Distress in Telecommunication Companies in Southeast Asia

Cash Flow Ratios and Business Failure of Healthcare Firms in Nigeria

Analysis of Solvability, Liquidity, and Company Size on Audit Delay With Audit Quality as Moderation

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