Financial Ratios and Financial Distress in Retail Trade Sector Companies

Abstract

The purpose of this study is to examine and explain the effect of the current ratio, return on asset, debt to asset ratio, and total assets turnover to financial distress in the retail trade sub sector for the 2015-2018 period both partially and simultaneously. The research population is all retail trade sector companies listed in Indonesia Stock Exchange (IDX). Sample was selected using the purposive sampling method. The method of data analysis in the form of a quantitative analysis using multiple regression analysis. The results of the study revealed that partially the CR does not affect financial distress while the return on assets, debt to assets ratio and total assets turnover in partial effect on financial distress. Simultaneously, the CR, ROA, DAR and TATO affect the financial distress. This can be a concern for companies to pay more attention to these four elements so that companies avoid financial distress conditions as well as for investors who want to invest. Abstrak: Tujuan dari penelitian ini adalah untuk menguji dan menjelaskan pengaruh current ratio, return on assets, debt to asset ratio, dan total assets turnover terhadap financial distress pada subsektor perdagangan eceran periode 2015-2018 baik secara parsial maupun simultan. Populasi penelitian ini adalah seluruh perusahaan sektor perdagangan eceran yang terdaftar di Bursa Efek Indonesia (BEI). Sampel dipilih dengan menggunakan metode purposive sampling. Metode analisis data berupa analisis kuantitatif dengan menggunakan analisis regresi berganda. Hasil penelitian mengungkapkan bahwa secara parsial CR tidak berpengaruh terhadap financial distress sedangkan return on assets, debt to assets ratio dan total assets turnover secara parsial berpengaruh terhadap financial distress. Secara simultan CR, ROA, DAR dan TATO berpengaruh terhadap financial distress. Hal ini dapat menjadi perhatian bagi perusahaan untuk lebih memperhatikan keempat unsur tersebut agar perusahaan terhindar dari kondisi financial distress serta bagi investor yang ingin berinvestasi.

Pengaruh Profitabilitas, Likuiditas, Leverage, Rasio Arus Kas dan Ukuran Perusahaan Terhadap Financial Distress

“…al., 2020). Terkait dengan Profitabilitas, Menurut Sihombing (2018) profitabilitas adalah tingkat keberhasilan emiten dalam mendatangkan keuntungan dengan sumber daya dipunyai emiten seperti pendapatan, kas, ekuitas, jumlah karyawan (Sasongko, et. al., 2021).…”

Study of Value Investing based on a Modern Approach

“…Consequently, retailers made significant investments in e-commerce between 2015 and 2021. These investments in e-commerce have aspired to satisfy current and prospective business needs (Sasongko et al, 2021). Several retailers adopted digital and e-commerce platforms to align with increasing customer preference for technology and digital spaces for transactions.…”

“…Several retailers adopted digital and e-commerce platforms to align with increasing customer preference for technology and digital spaces for transactions. Additionally, retailers have invested in digital platforms to align with changing behavior and lifestyle, where populations have gone virtual in entertainment, education, and healthcare (Sasongko et al, 2021). Consumer behavior and changing lifestyles necessitated retailers to adopt physical and digital modes of shopping and transactions.…”

“…Investments in automated shopping, digital marketing, and e-commerce have coincided with retailers' fortunes, as manifested by return on assets and gross profit margin metrics. In the last five years, retailers in the retail trade industry have experimented with cashless stores, physical world digitization, and digital goods sale (Sasongko et al, 2021). Several retailers plan to spend 70% of their budgets on elevating digital marketing.…”

“…The retail trade sector encounters periodic disruptions in the supply chain. The sudden and surprise disruptions in the supply chain necessitate strategies that promote resilience (Sasongko et al, 2021). Installing resilience points along the supply chain requires resetting the entire supply chain.…”