FINANCIAL RATIOS IMPACT ON SOE CONTAINER COMPANIES FINANCIAL DISTRESS

Saif Raafi'in Isfahan, Anggraini Syahputri, Helma Malini, Anwar Azazi

Abstract

This study uses asset tangibility as a mediating variable to examine the impact of liquidity, firm size, and profitability ratios on financial distress in Indonesian state-owned Container companies. The study runs from 2019 to 2023. The study applies multiple linear regression analysis on 14 state-owned Container companies listed on the Indonesia Stock Exchange. The Altman Z-score model is used to assess financial distress, with independent variables including the current ratio (liquidity), natural log of total assets (firm size), return on assets (profitability), and net tangible assets (asset tangibility). The study looks into direct impacts, mediating linkages, and interaction effects between variables. The result stated that profitability has directly affected financial distress and asset tangibility hasn’t directly affected financial distress and hasn’t meditated independent variables toward financial distress. Lastly, there are interaction effects of a combination of independent and meditating variables toward the dependent variable. This study recommends that Indonesian state-owned on container sector companies focus on three key areas to prevent financial distress: implementing robust liquidity monitoring systems with early warning mechanisms and clear guidelines for cash management, developing comprehensive asset management policies including regular maintenance and assessment, and establishing specific targets and cost optimization strategies. These measures are essential for maintaining financial stability and preventing distress in these container sector.

Full Text:

PDF

References

Abdelkader, N. A. M., & Wahba, H. H. (2024). A Proposed Multidimensional Model For Predicting Financial Distress: An Empirical Study On Egyptian Listed Firms. Future Business Journal, 10(1). Https://Doi.Org/10.1186/S43093-024-00328-2

Arianto, H., & Kurniasih, A. (2020). Journal Of Economics, Finance And Management Studies The Influence Of Financial Performance And Macroeconomic Factors On The Financial Distress Of Textile And Garment Companies Listed On The Stock Exchange: Empirical Studies In Indonesia. Https://Doi.Org/10.47191/Jefms/V6-I7-34

Ashraf, S., G. S. Félix, E., & Serrasqueiro, Z. (2019). Do Traditional Financial Distress Prediction Models Predict The Early Warning Signs Of Financial Distress? Journal Of Risk And Financial Management, 12(2). Https://Doi.Org/10.3390/Jrfm12020055

Azazi, A., Malini, H., & Daud, I. (2024). The Influence Of Profitability, Business Risk, Corporate Governance On Dividend Policy With Growth Opportunity As A Moderation Variable (Lq45 Companies Listed On The Bei). Journal Of Management Science (Jmas), 7(1), 310–319. Www.Exsys.Iocspublish

Bukhori, I., Kusumawati, R., & Meilani, M. (2022). Prediction Of Financial Distress In Manufacturing Companies: Evidence From Indonesia. Journal Of Accounting And Investment, 23(3), 588–605. Https://Doi.Org/10.18196/Jai.V23i3.15217

Chenchehene, J. (2019). Corporate Governance And Financial Distress Prediction In The Uk.

Christiana Iman Kalis, M., Permata Gusti, G., Tanjungpura, U., Hadari

Nawari, J. H., Laut, B., Pontianak Tenggara, K., Pontianak, K., & Barat, K. (2023). Leverage, Profitability, Liquidity, And Bond Ratings: Testing The Effects Of Company Size Interactions. In Ijafibs (Vol. 11, Issue 3). Www.Ijafibs.Pelnus.Ac.Id

Dafa Ilhani Salim, M., Fauzan, R., & Ndaru Mustika, U. (2023). Sales Growth, Liquidity, Leverage And Financial Distress: Testing The Interaction Effect Of Profitability. Jurnal Ekonomi, 12, 2023. Http://Ejournal.Seaninstitute.Or.Id/Index.Php/Ekonomi

Dirman, A. (2020). Financial Distress: The Impacts Of Profitability, Liquidity, Leverage, Firm Size, And Free Cash Flow. International Journal Of Business, Economics And Law, 22, 1.

Dwi Damayanti, A., Listiana, E., & Ndaru Mustika, U. (2023). The Effect Of Operating Capacity And Leverage On Financial Stability: Testing The Interaction Of Coporate Governance. In Ijafibs (Vol. 11, Issue 3). Www.Ijafibs.Pelnus.Ac.Id

Enrico, A & Virainy (2020). Faktor-Faktor Yang Mempengaruhi Financial Distress Pada Perusahaan Manufaktur. In Jurnal Multiparadigma Akuntansi Tarumanagara (Vol. 2, Issue 1).

Gichaiya, M. W., Muchina, S., & Macharia, S. (2019). Cost Of Capital, Firm Size And Financial Distress. 10(18). Https://Doi.Org/10.7176/Rjfa

Hillier, D., Ross, S., Westerfield, R., Jaffe, J., & Jordan Hillier, B. (2020). Corporate Finance. Www.Mheducation.Co.Uk

Indi Savery, Y. (2024). Financial Performance To Determine Financial Distress Conditions. Journal Of Management, Accounting, General Finance And International Economic Issues (Marginal) Marginal | Volume, 3(2). Https://Ojs.Transpublika.Com/Index.Php/Marginal/

Izzah, N., Iskak Elly, M., & Vidiyastutik, D. (2023). Pengaruh Good Corporate Governance Dan Firm Size Terhadap Financial Distress Pada Perusahaan Property Dan Real Estate Yang Terdaftar Di Bursa Efek Indonesia Tahun 2019-2021. In Journal Management, Accounting, And Digital Business Jumad (Vol. 1, Issue 4).

Malini, H. (2023). The Dynamism of Capital Structure for Financial Industry in Indonesia. Borneo Management Review, 1(1), 3009–1845. https://doi.org/10.5281/zenodo.10213350

Mantik, J., Boangmanalu, M. L., & Prabawa, A. (2024). The effect of financial literacy, financial self-efficacy and locus of control on the financial behaviour of Bengkulu University students. In Mantik Journal (Vol. 7, Issue 4). Online.

Masdupi, E., Tasman, A., & Davista, A. (2018). The Influence Of Liquidity, Leverage And Profitability On Financial Distress Of Listed Manufacturing Companies In Indonesia. Www.Idx.Co.Id.

Mesrawati, M., Selly, S., Sherlytan, S., Natalia Sinaga, M., & Apryani Saragih, R. (2022). The Effect Of Dar, Cr, Roa And Corporate Governance Mechanism On Financial Distress In Bumn Companies Go Public On Bei Year 2016-2020. Journal Research Of Social, Science, Economics, And Management, 1(7), 954–968. Https://Doi.Org/10.36418/Jrssem.V1i7.117

Minchatul Maula, M., Izzat Firdausi, M., Ekonomi Dan Bisnis Islam, F., Abdurrahman Wahid Pekalongan, U. K., Subulussalam, S., & Timur, O. (N.D.). Pengaruh Return On Equity, Current Ratio Dan Firm Size Terhadap Financial Distress Bank Syariah Non Bumn Yang Terdaftar Di Bei Periode 2015-2021. In Jief-Journal Of Islamic Economics And Finance (Vol. 3). Https://E-Journal.Uingusdur.Ac.Id/Jief/Index

Purwanti, D., & Ulan Sari, R. (2023). Prediction Of Financial Distress In Property And Real Estate Companies In Indonesia: Liquidity Ratio, Leverage Ratio, Activity Ratio, Profitability Ratio, Growth Ratio. In Management, Economics And Social Sciences. Ijamesc, Pt. Zillzell Media Prima (Vol. 1, Issue 02).

Renalita, P., & Tanjung, S. (2023). The Effect Of Financial Distress, Profitability And Current Ratio On Firm Value. Https://Doi.Org/10.36713/Epra1013|Sjif

Risal, Giriati, Wendy, Helma Malini (2024). Firm Size, Profitability, And Esg Disclosure In Indonesia: Geographical Location As Moderating Variable. In International Journal Of Economics Development Research (Vol. 5, Issue 1).

Suryadi, A., & Serly, V. (2022). Pengaruh Struktur Kepemilikan Terhadap Financial Distress: Studi Empiris Pada Perusahaan Bumn Di Indonesia Tahun 2015-2019. In Jurnal Eksplorasi Akuntansi (Jea) (Vol. 4, Issue 2). Online. Http://Jea.Ppj.Unp.Ac.Id/Index.Php/Jea/Index

Tjandra, C. K. (2022). The Determinants Of Working Capital Management In Indonesia And The Philippines. Jurnal Siasat Bisnis, 26(1), 110–121. Https://Doi.Org/10.20885/Jsb.Vol26.Iss1.Art8

Wahyudi, I. (2023). Effect Of Liquidity, Leverage, Company Size, Audit Committee On Financial Distress. In Journal Intelektual 2023 (Vol. 2, Issue 2). Https://Ejournal.Stieppi.Ac.Id/Index.Php/Jin/126

Widyo Ramadani, A., Ratmono, D., Erlangga Tengah, J., & Riset Akuntansi Kontemporer, J. (2023). Financial Distress Prediction: The Role Of Financial Ratio And Firm Size. 15(1), 19–26. Https://Journal.Unpas.Ac.Id/Index.Php/Jrak/Index

Wisnu, F., & Astuti, D. P. (2023). Financial Distress: Profitability Ratios And Liquidity Ratios, With Financial Statement Fraud As Moderating. Economic Education Analysis Journal, 12(2), 15–26. Https://Doi.Org/10.15294/Eeaj.V12i2.67570

Refbacks

  • There are currently no refbacks.