The Effect of Liquidity, Profitability, and Solvency to the Financial Distress in Agricultural Sector Companies Listed on the Indonesia Stock Exchange (IDX)

Egi Lolita Sukma, Ria Anggraini, Hanna Tiurma Tinambunan

2021

Abstract

This study aims to analyze financial ratios, namely liquidity ratios, profitability ratios, and solvency ratios that affect financial distress conditions. This study uses quantitative research methods. The data used is on agricultural companies on the Indonesia Stock Exchange (IDX) in 2015-2019, with 75 samples. The dependent variable of financial distress was measured using the Altman analysis model (Z-Score). The independent variables were measured using financial ratio indicators, namely liquidity ratios, profitability ratios, and solvency ratios. This study uses secondary data with database collection techniques and uses a non-probability sampling technique, purposive sampling. The data used is panel data regression, using the Eviews 9 application. This study shows that the liquidity ratio with the working capital and current ratio to total assets proxies affects financial distress conditions. Profitability ratios with Return on Equity and return on assets proxies affect financial distress conditions. The solvency ratio as measured by debt to total assets affects financial distress conditions. While the solvency ratio analysed by debt to total Equity and time interest earned does not affect the financial Ratio.

Paper Citation

in Harvard Style

Sukma E., Anggraini R. and Tinambunan H. (2021). The Effect of Liquidity, Profitability, and Solvency to the Financial Distress in Agricultural Sector Companies Listed on the Indonesia Stock Exchange (IDX). In Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS, ISBN 978-989-758-605-7, pages 97-108. DOI: 10.5220/0010860200003255

in Bibtex Style

@conference{icaess21,
author={Egi Lolita Sukma and Ria Anggraini and Hanna Tiurma Tinambunan},
title={The Effect of Liquidity, Profitability, and Solvency to the Financial Distress in Agricultural Sector Companies Listed on the Indonesia Stock Exchange (IDX)},
booktitle={Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,},
year={2021},
pages={97-108},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010860200003255},
isbn={978-989-758-605-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,
TI - The Effect of Liquidity, Profitability, and Solvency to the Financial Distress in Agricultural Sector Companies Listed on the Indonesia Stock Exchange (IDX)
SN - 978-989-758-605-7
AU - Sukma E.
AU - Anggraini R.
AU - Tinambunan H.
PY - 2021
SP - 97
EP - 108
DO - 10.5220/0010860200003255