Is Financial Distress Cost Important For Determining Firm Performance

Estu Widarwati, Dewi Sartika

2018

Abstract

The global financial crisis provides the importance in developing model to monitor, identify and asses potential risks that can threat business sustainability. Financial Distress Cost (FDC) seems to be one of early signal about early risk of decreasing of firm performance such as sales growth and stock return. Futhermore it give early signal to firm reducing the loss possibility before it lead to firm’s bankruptcy. This research aims to explain the evidence of FDC in Indonesia’s industry and its impact to firm performance. The data use financial reports of 107 firms of manufacture industry listed in Indonesia Stock Exchange (IDX) for 2011 – 2017 and all analyzed using panel regression for presenting FDC’s impact. The descriptive analysis show that Indonesia’s manufacture industry have higher FDC and lower sales growth after based year of crisis. There is a negative impact of FDC to firm’s sales growth. The result proposes that FDC can be used as an early determinant for reducing loss possibility of firm’s market share.

Paper Citation

in Harvard Style

Widarwati E. and Sartika D. (2018). Is Financial Distress Cost Important For Determining Firm Performance.In Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC, ISBN 978-989-758-387-2, pages 540-545. DOI: 10.5220/0008442305400545

in Bibtex Style

@conference{seabc18,
author={Estu Widarwati and Dewi Sartika},
title={Is Financial Distress Cost Important For Determining Firm Performance},
booktitle={Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC,},
year={2018},
pages={540-545},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008442305400545},
isbn={978-989-758-387-2},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 4th Sriwijaya Economics, Accounting, and Business Conference - Volume 1: SEABC,
TI - Is Financial Distress Cost Important For Determining Firm Performance
SN - 978-989-758-387-2
AU - Widarwati E.
AU - Sartika D.
PY - 2018
SP - 540
EP - 545
DO - 10.5220/0008442305400545