Assessing Financial Distress Drivers: Financial Metrics and Corporate Practices in Indonesian Manufacturing Companies

Paula Fazila

doi:10.61656/ijospat.v2i1.238

Paula Fazila Tanjungpura University

DOI: https://doi.org/10.61656/ijospat.v2i1.238

Keywords: CSR, financial distress, GCG, leverage, liquidity, profitability, sales growth

Abstract

Understanding the factors that contribute to financial distress is crucial for assessing the financial health of companies. This research examines, validates, and analyses the influence of leverage, liquidity, profitability, sales growth, good corporate governance (GCG), and corporate social responsibility (CSR) on financial distress. The study utilizes secondary data derived from financial statements. The sample consists of 310 financial reports from manufacturing companies listed on the Indonesia Stock Exchange (IDX) over five years (2015-2019), selected through purposive sampling. Logistic regression analysis was applied in this study. The findings indicate that leverage, liquidity, profitability, and CSR significantly impact financial distress. In contrast, sales growth and GCG do not substantially affect financial distress. These results suggest that companies should focus on managing leverage and liquidity while enhancing profitability and CSR practices to mitigate financial distress risks. On the other hand, policymakers need to establish regulations and incentives that encourage responsible financial management and social responsibility initiatives. It is important to prevent financial distress and provide a direction for companies and policymakers to enhance financial stability and sustainability.

Downloads

Download data is not yet available.

References

Affiah, A., & Muslih, M. (2018). Pengaruh Leverage, Profitabilitas, dan Good Corporate Governance terhadap Financial Distress (Studi Kasus pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia Tahun 2012-2016). Ekspansi, 10(2), 241–256. https://doi.org/https://doi.org/10.35313/ekspansi.v10i2.1213.

Agustini, N. W., & Wirawati, N. G. P. (2019). Pengaruh Rasio Keuangan pada Financial Distress Perusahaan Ritel yang Terdaftar di Bursa Efek Indonesia (BEI). E-Jurnal Akuntansi Universitas Udayana, 26(1), 251–280. https://doi.org/https://doi.org/10.24843/EJA.2019.v26.i01.p10

Ananto, R. P., Mustika, R., & Handayani, D. (2017). Pengaruh Good Corporate Governance (GCG), Leverage, Profitabilitas dan Ukuran Perusahaan terhadap Financial Distress pada Perusahaan Barang Konsumsi yang Terdaftar di Bursa Efek Indonesia. Jurnal Ekonomi & Bisnis Dharma Andalas, 19(1), 92–105.

Azahro, I. S. & Suryaningrum, D. H. (2024), Relationship Between Financial Distress and Earnings Management. SAR (Soedirman Accounting Review): Journal of Accounting and Business, [S.l.], v. 9, n. 01, p. 76 - 87, June 2024. https://doi.org/10.32424/1.sar.2024.9.01.11891.

Boubaker, S., Cellier, A., Manita, R., & Saeed, A. (2020). Does Corporate Social Responsibility Reduce Financial Distress Risk? Economic Modelling. https://doi.org/https://doi.org/10.1016/j.econmod.2020.05.012

Chrissentia, T., & Syarief, J. (2018). Analisis Pengaruh Profitabilitas, Leverage, Likuiditas, Firm Age, dan Kepemilikan Institusional terhadap Financial Distress. SiMAk, 16(1), 45–61. https://doi.org/https://doi.org/10.35129/simak.v16i01.11

Cnnindonesia.com. (2019). Sri Mulyani Ungkap BUMN Pertanian Rentan Bangkrut. https://www.cnnindonesia.com/ekonomi/20191202194547-92-453506/sri-mulyaniungkap-bumn-pertanian-rentan-bangkrut

Dianova, A., & Nahumury, J. (2019). Investigating the Effect of Liquidity, Leverage, Sales Growth and Good Corporate Governance on Financial Distress. Journal of Accounting and Strategic Finance, 2(2), 143–156. https://doi.org/https://doi.org/10.33005/jasf.v2i2.49

Fahlevi, E. D., & Mukhibad, H. (2018). Penggunaan Rasio Keuangan dan Good Corporate Governance untuk Memprediksi Financial Distress. Jurnal Reviu Akuntansi dan Keuangan, 8(2), 147–158. https://doi.org/10.22219/jrak.v8i2.34

Farida, A. L., & Sugesti, P. F. (2023). Determinant of Earnings Management: Financial Distress, Tax Planning, Audit Quality, and Public Accountant Firm Size. JASF: Journal of Accounting and Strategic Finance, 6(1), 1–15. https://doi.org/10.33005/jasf.v6i1.386

Fathonah, A. N. (2016). Pengaruh Penerapan Good Corporate Governance terhadap Financial Distress. Jurnal Ilmiah Akuntansi, 1(2), 133–150. https://doi.org/http://dx.doi.org/10.23887/jia.v1i2.9989

Gantyowati, E., & Nugraheni, R. L. (2014). The Impact of Financial Distress Status and Corporate Governance Structures on the Level of Voluntary Disclosure Within Annual Reports of Firms (Case Study of Non-financial Firms in Indonesia Over the Period of 2009-2011. Journal of Modern Accounting and Auditing, 10(4), 1–121. https://www.davidpublisher.com/index.php/Home/Article/index?id=1277.html

Harahap, S. S. (2011). Teori Akuntansi. Rajawali Press.

Hery. (2015). Analisis Laporan Keuangan. CAPS.

Hidayat, M. A., & Meiranto, W. (2014). Prediksi Financial Distress Perusahaan Manufaktur di Indonesia. Diponegoro Journal of Accounting, 3(3), 1–11. https://ejournal3.undip.ac.id/index.php/accounting/article/view/6198/5984

Jensen, M. C., & Meckling, W. H. (1976). Theory of The Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kartika, A., Rozak, H. A., Nurhayat, I., & Bagana, B. D. (2020). Rasio Keuangan sebagai Prediksi Financial Distress. Prosiding SENDI_U, 675–681. https://www.unisbank.ac.id/ojs/index.php/sendi_u/article/view/8052

Li, Z., Crook, J., Andreeva, G., & Tang, Y. (2020). Predicting the risk of financial distress using corporate governance measures. Pacific-Basin Finance Journal, February, 101334. https://doi.org/10.1016/j.pacfin.2020.101334

Liputan6.com. (2021). Kilas Balik Dampak Pandemi Covid-19 ke Ekonomi Dunia dan Indonesia. Www.Liputan6.Com. https://www.liputan6.com/bisnis/read/4483655/kilasbalik-dampak-pandemi-covid-19-ke-ekonomi-dunia-dan-indonesia

Mafiroh, A., & Triyono. (2016). Pengaruh Kinerja Keuangan dan Mekanisme Corporate Governance terhadap Financial Distress. Riset Akuntansi dan Keuangan Indonesia, 1(1). https://doi.org/10.23917/reaksi.v1i1.1956

Mahaningrum, A. A. I. A., & Merkusiwati, N. K. L. A. (2020). Pengaruh Rasio Keuangan pada Financial Distress. E-Jurnal Akuntansi, 30(8), 1969–1984. https://doi.org/10.24843/EJA.2020.v30.i08.p06

Maria, E., Halim, A., & Suwardi, E. (2021). Financial Distress, Regional Independence and Corruption: An Empirical Study in Indonesian Local Governments. JASF: Journal of Accounting and Strategic Finance, 4(1), 54–70. https://doi.org/10.33005/jasf.v4i1.159

Moleong, L. C. (2018). Pengaruh Real Interest Rate dan Leverage Terhadap Financial Distress. Modus: Open Journal Systems, 30(1), 71–86. https://ojs.uajy.ac.id/index.php/modus/article/view/1588

Muflihah, I. Z. (2017). Analisis Financial Distress Perusahaan Manufaktur di Indonesia dengan Regresi Logistik. Majalah Ekonomi, XXII(2), 254–269. https://jurnal.unipasby.ac.id/index.php/majalah_ekonomi/article/view/1020

Oktarina, D. (2018). The Effect of Disclosure of Sustainability Report on Financial Distress with Company Performance as Intervening Variables. Journal of Accounting and Strategic Finance, 1 (2), 109-121. http://eprints.perbanas.ac.id/7174/

Pedoman Umum Good Corporate Governance Indonesia. (2006). Komite Nasional Kebijakan Governance. https://ecgi.global/sites/default/files/codes/documents/indonesia_cg_2006_id.pdf

Platt, H. D., & Platt, M. B. (2002). Predicting corporate financial distress: Reflections on choice-based sample bias. Journal of Economics and Finance, 26(2), 184–199. https://doi.org/10.1007/bf02755985

Purwaningsih, R. W., & Aziza, N. (2019). Pengaruh Corporate Social Responsibility terhadap Financial Distress Dimoderasi oleh Siklus Hidup Perusahaan pada Tahap Mature. Jurnal Akuntansi, 9(3), 173–186. https://doi.org/https://doi.org/10.33369/j.akuntansi.9.3.173-186

Ridanti, P. P. & Suryaningrum, D. H. (2021), The Effect of Financial Distress, Internal Control, and Debt Structure on Earnings Management in Companies Registered in Indonesia Stock Exchange, JASa (Jurnal Akuntansi Auditing dan Sistem Informasi Akuntansi), 5(3), 458-472. http://journalfeb.unla.ac.id/index.php/jasa/article/view/1630

Sahamok.net. (2020). Saham Delisting. Www.Sahamok.Net. https://www.sahamok.net/emiten/saham-delisting/

Saputra, A. J., & Salim, S. (2020). Pengaruh Profitabilitas, Leverage, Firm Size, dan Sales Growth Terhadap Financial Distress. Jurnal Multiparadigma Akuntansi Tarumanagara, 2(1), 262–269. https://doi.org/http://dx.doi.org/10.24912/jpa.v2i1.7154

Sari, P. R., & Nuzula, N. F. (2019). Pengaruh Karakteristik Perusahaan terhadap Pengungkapan Corporate Social Responsibility (CSR) (Studi Pada Perusahaan LQ45 yang Terdaftar di Bursa Efek Indonesia Periode 2015-2017). Urnal Administrasi Bisnis (JAB), 72(57–66). https://repository.ub.ac.id/id/eprint/172373/1/Prima%20Rahma%20Sari.pdf

Spence, M. (1973). Job Market Signalling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/https://doi.org/10.2307/1882010

Suprabha, K. R., Sreepriya, J., & Prasad, K (2024), The impact of ESG disclosure on mitigating financial distress: exploring the moderating role of firm life cycle, International Journal of Disclosure and Governance, 16 February 2024. https://link.springer.com/article/10.1057/s41310-024-00225-8?form=MG0AV3.

Suryani. (2020). Pengaruh Profitabilitas, Likuiditas, Leverage, dan Ukuran Perusahaan terhadap Financial Distress. Jurnal Online Insan Akuntan, 5(2), 229–244. https://ejournal-binainsani.ac.id/index.php/JOIA/article/view/1440

Tyaga, M. S., & Kristanti, F. T. (2020). Analisis Survival dalam Memprediksi Kondisi Financial Distress. Buletin Studi Ekonomi, 25(1), 112. https://doi.org/10.24843/bse.2020.v25.i01.p07

Utami, E. F., Rahman, A., & Kartika, R. (2021). Corporate Social Responsibility, Financial Distress, dan Siklus Hidup Perusahaan. Journal of Economics and Business, 5(1), 106–116. https://doi.org/http://dx.doi.org/10.33087/ekonomis.v5i1.289

Wibowo, A., & Susetyo, A. (2020). Analisis Pengaruh Profitabilitas, Likuiditas, Operating Capacity, Sales Growth terhadap Kondisi Financial Distress pada Perusahaan Manufaktur yang terdaftar di Bursa Efek Indonesia Tahun 2015-2018. Jurnal Ilmiah Mahasiswa Manajemen, Bisnis dan Akuntansi, 2, 929. https://doi.org/https://doi.org/10.32639/jimmba.v2i6.687

Widharma, F., & Susilowati, E. (2020). Auditor Switching, Financial Distress, and Financial Statement Fraud Practices with Audit Report Lag as Intervening Variable. JASF: Journal of Accounting and Strategic Finance, 3(2), 243–257. https://doi.org/10.33005/jasf.v3i2.135

Widhiari, N. L. M. A., & Merkusiwati, N. K. L. A. (2015). Pengaruh Rasio Likuiditas, Leverage, Operating Capacity, dan Sales Growth terhadap Financial Distress. E-Jurnal Akuntansi Universitas Udayana, 11(2), 456–469.

https://repositori.unud.ac.id/protected/storage/upload/repositori/70a4dd27b6f0237aeef9e0667a9ae426.pdf

Yolanda, J., & Kristanti, F. T. (2020). Analisis Survival pada Financial Distress Menggunakan Model Cox Hazard. Economic, Business, Management, and Accounting Journal, XVII(2), 21–31. https://doi.org/http://dx.doi.org/10.30651/blc.v17i2.4260