Does Liquidity or Profitability Influence Firm Financial Distress Most? Empirical Study on Manufacturing Companies Listed in Indonesia Stock Exchange (2015-2019)

DOI

10.2991/aebmr.k.220701.013How to use a DOI?

Keywords

Financial Distress; Liquidity Ratio; Profitability Ratio

Abstract

This study aims to see how liquidity ratios and profitability ratios can predict the likelihood of financial distress and which ones have the most influence. This study took 7 (seven) ratios included in the category of liquidity ratios and profitability ratios. The object of this research was carried out in manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019 with a sample size of 107. This study uses logit regression because financial ratios do not have to be normal if used and logit can predict the percentage of accuracy. The results showed that the ratio of working capital to total assets and the ratio of net income to equity dominated the contribution in determining financial distress with the overall accuracy percentage being 88.9%.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Boby Sagita
AU  - Nugraha Nugraha
PY  - 2022
DA  - 2022/07/12
TI  - Does Liquidity or Profitability Influence Firm Financial Distress Most? Empirical Study on Manufacturing Companies Listed in Indonesia Stock Exchange (2015-2019)
BT  - Proceedings of the 6th Global Conference on Business, Management, and Entrepreneurship (GCBME 2021)
PB  - Atlantis Press
SP  - 51
EP  - 56
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220701.013
DO  - 10.2991/aebmr.k.220701.013
ID  - Sagita2022
ER  -