The Effect of Liquidity, Leverage and Profitability on Financial Distress

Diyanto, Volta

doi:10.31258/ijesh.2.2.127-133

Cited by 18 publications

(39 citation statements)

References 4 publications

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“…This result is based on p-value of the profitability ratio of 0.000, the activity ratio of 0.05 and the investment ratio of 0.041 which is smaller than 0.05 with positive t-statistics of 5.890, 3.0904 and 2.343, respectively. Similar thing about profitability ratio obtained by Moch et al (2019), Indriaty, Setiawan, andPravasanti (2019) and Subiyanto and Siagian (2020), about activity ratio obtained by Yacobus and KP (2021) and about investment ratio obtained by Keter et al (2018). However, these results contradict research of Nurhayati, Mufidah, and Kholidah (2017), Amoa-Gyarteng (2021) and Kristanti et al (2015).…”

Section: The Profitability Activity and Investment Ratio Partially Af...supporting

confidence: 82%

“…The higher profitability shows that the business's operational and financial strategies can provide more earnings. Moch et al (2019) and Subiyanto and Siagian (2020) provides evidence that the profitability ratio affects financial distress. H3: The profitability ratio significantly affects financial distress prediction.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Moch, Prihatni, and Buchdadi (2019) also found that CR, DER, and ROA affect on financial distress. Profitability ratio with ROA affects financial distress (Subiyanto & Siagian, 2020). Yacobus and KP (2021) find the activity ratio affects financial distress and Keter, Bogonko, and Kimutai (2018) found that PER affects financial distress.…”

Section: Introductionmentioning

confidence: 99%

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Forecasting Financial Distress of Airline Company: The Impact of Financal Performance

Rachmawati

2022

JICP

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This study aims to predict the financial distress of airline companies which is influenced by the ratio of liquidity, solvency, profitability, activity and investment. This research is inferential research with a quantitative approach. This research used financial statements of airline companies listed on the Indonesia Stock Exchange in 2018-2021 as the data. Data analysis was performed using multiple linear regression. The results showed that the liquidity ratio (Current Ratio) and solvency ratio (Debt to Equity Ratio) partially had no effect on the prediction of financial distress as measured using Springate model. Profitability ratio (Return on Assets), activity ratio (Total Assets Turnover) and investment ratio (Price Erning Ratio) partially have a positive effect on the prediction of financial distress. The profitability ratio has an influence of 81%, the activity ratio has 27.8% and the investment ratio has 7.6% on the prediction of financial distress. The prediction result of financial distress are not solely influenced by the company's ability to pay debts, both short term and long term. Conditions related to asset performance, such as Return on Assets and Total Asset Turnover actually affect the prediction results of financial distress.

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Section: The Profitability Activity and Investment Ratio Partially Af...supporting

confidence: 82%

Section: Hypothesis Developmentmentioning

confidence: 99%

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Forecasting Financial Distress of Airline Company: The Impact of Financal Performance

Rachmawati

2022

JICP

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“…Semakin tinggi DERkian tidak memberi keuntungan sebab akan kian besar risiko yang diterima perusahaan terkait sebab belum mampu bayar (Kasmir, 2017). Merujuk paparan riset (Diyanto, 2020) bahwa DER berpengaruh negatif terhadap Z-Score (Financial Distress), senada riset yang dihasilkan (Desiyanti et al, 2019), (Rohmadini et al, 2018) yang menunjukkan hasil yang serupa. Berbeda dengan penelitian (Tutliha & Rahayu, 2019) yang mengungkap bahwa DER tidak mempengaruhiFinancial Distress.…”

Section: H2 : Cr Berpengaruh Positif Terhadap Nilai Z-scoreunclassified

“…Apabila dananya cukup akan memperkecil Financial Distress yang terjadi pada perusahaan (Hery, 2017) . Hasil penelitiannya ini didukung penelitian yang dilaksanakan sebelumnya dari (Solihati, 2020), (Dirman, 2020), (Diyanto, 2020), (Chairunesia et al, 2020), (Sarina et al, 2020) dan (Hakim et al, 2020) yang menunjukkan hasil yang serupa dengan penelitiannya ini. Tetapi hasil tersebut memiliki pengaruh yang bertentangan dan berlawanan arah dengan penelitian (Zhafirah & Majidah, 2019) dan (Rohmadini et al, 2018).…”

Section: Pengaruh Roa Terhadap Financial Distress Perusahaan Sektor P...unclassified

Faktor Penentu Financial Distress pada Perusahaan Sektor Pertanian yang Terdaftar di BEI Periode 2015-2019

Noviyani

Yulianti²

2022

simo

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Purpose: The motive of this studiesto determine impact of ROA, CR, DER on financial distress the use of Altman Z-score approach. Research Methodology: This studies is a quantitative research using panel data dimensions, descriptive and associative data analysis, non probability sampling and purposive sampling techniques, as well as using the random effects model analysis method on Eview10. Result: The effects of this study suggest ROA has positive effect on the Z-Score, CR has positive effect on the Z-Score and DER has negative effect on the Z-Score, simultaneously ROA,CR,DER afffect financial distress. Limitations: The limitations in this study are best performed within the argicultural area listed on Indonesia Stock Exchange for the 2015-2019 period in line with the researcher’s criteria by the use of ROA,CR,DER variabels in predicting the potential for financial distress and using Altman Z-score technique which has the opposite interpretation. Contribution: Research contribution to provide information for argicultural sector companies to improve performance so as to avoid potential financial distress, be considered for investor earlier than making an investment so the get income, and as facts for in addition research. Keywords: 1. Altman Z-Score 2. Current Ratio 3. Debt to Equity Ratio 4. Financial Distress 5. Return on Assets

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Survival of ASEAN Firms: Understanding Profitability, Liquidity, and Solvency Dynamics During Financial Distress

Mega Rizqiyani,

Qodriyani,

Ashsifa

2024

KSS

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In the dynamic landscape of business, a firm’s financial sustainability is paramount for long-term growth and operational stability. Key components of a firm’s financial structure include profitability, liquidity, and solvency. This study examines their impact on financial distress within the ASEAN region from 2012 to 2021, utilizing a sample of 44,800 observations. The findings reveal that profitability and liquidity exhibit a negative relationship with financial distress, suggesting that firms with higher profitability and liquidity are less susceptible to financial difficulties. Conversely, solvency demonstrates a positive association with financial distress, indicating that firms with greater solvency may face heightened risks of encountering financial distress. These findings hold significant implications for corporate decision-makers, financial analysts, and policymakers. Understanding the interplay among profitability, liquidity, and solvency enables firms to develop robust financial strategies to mitigate the likelihood of financial challenges. This research contributes valuable insights to the discourse on managing financial risks, offering guidance for prudent financial decision-making amidst evolving business landscapes. Keywords: profitability, liquidity, solvency, financial distress

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The Effect of Liquidity, Leverage and Profitability on Financial Distress

Cited by 18 publications

References 4 publications

Forecasting Financial Distress of Airline Company: The Impact of Financal Performance

Forecasting Financial Distress of Airline Company: The Impact of Financal Performance

Faktor Penentu Financial Distress pada Perusahaan Sektor Pertanian yang Terdaftar di BEI Periode 2015-2019

Survival of ASEAN Firms: Understanding Profitability, Liquidity, and Solvency Dynamics During Financial Distress

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