Effect of Financial Ratios on Financial Distress of Retail Trade Companies Listed on the Indonesia Stock Exchange

Sinarti, Maresyah Handayani, Nguyen Thi Hoang Oanh

2021

Abstract

This study aims to examine the effect of financial ratios on financial distress in retail trade sub-sector companies in Indonesia. Profitability is measured by Return on Equity (ROE), leverage as measured by Debt-to-Equity Ratio, Liquidity is measured by Current Ratio (CR), and Financial distress is measured by Z-Score. This study uses secondary data with data collection techniques using financial statements of retail trade sub-sector companies listed on the Indonesia Stock Exchange for the period 2014-2018. The sampling technique used the purposive sampling method, obtained several 14 companies that fulfill the criteria with a total population of 26 companies, the total observation for five years was 70 samples. The test method in this study uses panel data regression analysis with Eviews 9. This study found that the Return on Equity has a significant positive impact on Financial Distress in the retail trade sub-sector. This study also found that the Debt Equity Ratio has a significant negative effect on Financial Distress on retail trade sub-sector and Current Ratio has an insignificant negative effect on Financial Distress on retail trade sub-sector

Paper Citation

in Harvard Style

Sinarti., Handayani M. and Thi Hoang Oanh N. (2021). Effect of Financial Ratios on Financial Distress of Retail Trade Companies Listed on the Indonesia Stock Exchange. In Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS, ISBN 978-989-758-605-7, pages 109-116. DOI: 10.5220/0010861500003255

in Bibtex Style

@conference{icaess21,
author={Sinarti and Maresyah Handayani and Nguyen Thi Hoang Oanh},
title={Effect of Financial Ratios on Financial Distress of Retail Trade Companies Listed on the Indonesia Stock Exchange},
booktitle={Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,},
year={2021},
pages={109-116},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010861500003255},
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 - Effect of Financial Ratios on Financial Distress of Retail Trade Companies Listed on the Indonesia Stock Exchange
SN - 978-989-758-605-7
AU - Sinarti.
AU - Handayani M.
AU - Thi Hoang Oanh N.
PY - 2021
SP - 109
EP - 116
DO - 10.5220/0010861500003255