The Effect of Financial Ratios on the Possibility of Financial Distress in Selected Manufacturing Companies Which Listed in Indonesia Stock Exchange
- 10.2991/aebmr.k.200331.014How to use a DOI?
- debt ratio, liquidity, earning, activity, possibility of financial distress
This study purposed to confirm the influence of financial ratios toward the possibility of financial distress in the listed manufacturing companies in the Indonesia Stock Exchange. Using a selected sample consist of 30 emitens with 90 units of analysis, the relationship between financial ratios and financial distress during the period of 2015-2017 was tested. The results revealed that the ratios of activity are not significantly affect the possibility of financial distress. Liquidity ratios significant negatively affect the possibility of financial distress. Furthermore, debt ratios and earnings ratios significant positively affect the possibility of financial distress. The research recommends that liquidity ratios and debt ratios are the best ratios that can be used to predict financial distress. The study also recommends that the earnings ratios associated with liquidity ratios be provided in financial statements in order for users to make informed decisions in case of financial distress conditions.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Rudolf Lumbantobing PY - 2020 DA - 2020/04/06 TI - The Effect of Financial Ratios on the Possibility of Financial Distress in Selected Manufacturing Companies Which Listed in Indonesia Stock Exchange BT - Proceedings of the 6th Annual International Conference on Management Research (AICMaR 2019) PB - Atlantis Press SP - 60 EP - 63 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200331.014 DO - 10.2991/aebmr.k.200331.014 ID - Lumbantobing2020 ER -