Value Added : Majalah Ekonomi dan Bisnis
Vol 19, No 2 (2023): Value Added : Majalah Ekonomi dan Bisnis

THE EFFECT OF FINANCIAL RATIO ON FINANCIAL DISTRESS IN MINING COMPANIES

Nurcahyono Nurcahyono (Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Semarang)
Putri Adelia (Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Semarang)
Lany Christanty (Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Magelang)
Wawan Sadtyo Nugroho (Department of Accounting, Faculty of Economics and Business, Universitas Muhammadiyah Magelang)



Article Info

Publish Date
26 Oct 2023

Abstract

Empirically this study examines the factors that cause companies to experience financial distress. Financial distress is a phenomenon companies face, especially during a pandemic—detecting financial distress using ratios that describe profitability, use of debt and company activities. The focus of this research is mining companies in Indonesia. The unit of analysis in this research is 18 companies with 72 observations. The data analysis method used is multiple linear regression using the Zmijweski proxy to measure the company's level of financial distress. The research results show that many companies experienced financial distress during the pandemic. Companies with high profitability during a pandemic can prevent the company from going bankrupt. Increased liquidity in mining companies will deter companies from financial distress. Conversely, the higher the debt ratio under conditions of uncertainty, the faster the company will go bankrupt. Finally, the activity ratio cannot predict financial distress, especially in mining companies

Copyrights © 2023






Journal Info

Abbrev

vadded

Publisher

Subject

Economics, Econometrics & Finance Social Sciences

Description

Value Added: Majalah Ekonomi dan Bisnis strives to publish scientific research articles reporting empirical results as well as conceptual ideas in the field of management, such as strategic management, marketing management, human resources management, technology management, finance management, ...