Analysis Of The Determinants Of Financial Distress In Technology Sector Companies On The Indonesia Stock Exchange For The 2019-2022 Period

Fuji Asih Aini; Ari Andika; Didik Gunawan; Willy Cahyadi

Authors

Fuji Asih Aini Bina Karya College of Economics (STIE), Tebing Tinggi, Indonesia
Ari Andika Bina Karya College of Economics (STIE), Tebing Tinggi, Indonesia
Didik Gunawan Bina Karya College of Economics (STIE), Tebing Tinggi, Indonesia
Willy Cahyadi Bina Karya College of Economics (STIE), Tebing Tinggi, Indonesia

Keywords:

Liquidity, Leverage, profitability, financial distress, data panel regression

Abstract

Companies in the technology sector tend to experience fluctuations in their financial performance. This research aims to determine the effect of liquidity, leverage and profitability on the occurrence of financial distress in technology sector companies from 2019 to 2022. This research uses quantitative research methodology and uses purposive sampling in taking samples. The testing methodology used is panel data regression, using a dataset consisting of 64 data points and carried out through the use of the E-Views 10 program. Research findings show that variables such as liquidity, leverage, and profitability do not have any influence on the likelihood of a financial disaster. There are other influencing factors such as government policies during the Covid 19 pandemic in the form of WFH and the macroeconomic situation such as interest rate hikes.

Downloads

Download data is not yet available.

References

Aditya Kusuma Wardhana, WI (2021). Analysis of Financial Distress with Profitability as Moderating Variable. Journal of Accounting , 25 (2), 222. https://doi.org/10.24912/ja.v25i2.807

Agustini, NW, & Wirawati, NGP (2019). The Influence of Financial Ratios on Financial Distress of Retail Companies Listed on the Indonesia Stock Exchange (BEI). Accounting E-Journal , 26 , 251. https://doi.org/10.24843/eja.2019.v26.i01.p10

Aji, PS, & Anwar, S. (2022). The Influence of Leverage, Profitability, Liquidity, Sales Growth and Firm Size on Financial Distress in Pulp & Paper and Plastic & Packaging Companies Listed on the Indonesian Stock Exchange. Journal of National Development Economics , 15 (1), 43–51. https://doi.org/10.46306/jbbe.v15i1.106

Arseto, D., Arfah, Y., & Siregar, S. (2022). The Effect of Capital Adequacy Ratio (CAR) and Liquidity on Profitability of Islamic Commercial Banks in Indonesia for the 2015-2019 Period. International Journal of Multidisciplinary Research and Analysis , 05 (01), 909–915. https://doi.org/10.47191/ijmra/v5-i1-04

Ary Putri, RM, Paramu, H., & Awwaliyah, IN (2020). Financial Distress Prediction in Subfrastructure, Utility and Transportation Sub Sector Services in Indonesia. Journal of Management and Business , 19 (2), 44–54. https://doi.org/10.24123/jmb.v19i2.451

Astuti, MD, Hermuningsih, S., & Maulida, A. (2021). The Financial Ratio Analysis in Predicting the Conditions of Financial Distress. Almana : Journal of Management and Business , 5 (2), 235–240. https://doi.org/10.36555/almana.v5i2.1604

Ayinaddis, S. G., & Tegegne, H. G. (2023). Uncovering financial distress conditions and its determinant factors on insurance companies in Ethiopia. PLoS ONE , 18 (10 October), 1–15. https://doi.org/10.1371/journal.pone.0292973

Azizah, N., Nani, DA, & Anggarini, DR (2023). Determinants of Financial Distress in Finance Companies Listed on the Indonesian Stock Exchange. Indonesian Accounting Journal , 12 (2), 124. https://doi.org/10.30659/jai.12.2.124-137

Candy1, & Veni, S. (2023). Financial Ratio, Distress, and Performance in Indonesian Transportation Companies, 7 (3), 517–528. https://doi.org/10.36555/almana.v7i3.2246

Dini, S., Selvia, S., Octavia, V., & Sidebang, CNB (2021). Capital Structure, Profitability, Liquidity, Leverage and Financial Distress. Accounting E-Journal , 31 (11), 2761. https://doi.org/10.24843/eja.2021.v31.i11.p07

Dirman, A. (2020). Financial Distress: the Impacts of Profitability, Liquidity, Leverage, Firm Size, and Free Cash Flow. International Journal of Business, Economics and Law , 22 (1), 1.

Erwan, E., Martusa, R., & Meythi, M. (2023). Do Profitability, Leverage, and Company Size Reduce Company Financial Difficulties? Journal of Multiparadigm Accounting , 14 (2), 412–421. https://doi.org/10.21776/ub.jamal.2023.14.2.29

Gunawan, D., & Lala. (2023). Financial Distress Prediction Model in Property and Real Estate Sector Companies. Edunomics , 7 (1), 1–16.

Hadisantoso, E., Mayasari, I., & Yulianti, AF (2023). How liquidity, profitability, and leverage ratios influence financial distress : A study on Indonesian mining firms, 11 (3), 243–252. https://doi.org/10.22437/ppd.v11i3.27470

Heniwati, E., & Essen, E. (2020). Which Retail Firm Characteristics Impact On Financial Distress? Journal of Accounting and Finance , 22 (1), 40–46. https://doi.org/10.9744/jak.22.1.30-36

Ilham, RN, Putri, DE, Sinurat, M., Likdanawati, L., & Sinta, I. (2021). THE INFLUENCE OF FINANCIAL RATIO ON PROFIT CHANGES (Empirical Study of Consumer Good Companies Listed on the IDX for the 2015-2019 Period). Journal of Accounting and Taxation , 22 (2), 587. https://doi.org/10.29040/jap.v22i2.3146

Karlina, N., & Rahman, R. S. (2023). The Effect of Liquidity and Profitability on Company Value: Study on Cement Companies Listed on The Indonesia Stock Exchange For The 2016-2020 Period. Acman: Accounting and… , 3 (1), 42–48. Retrieved from http://journal.lemlit.org/ojs/index.php/aj/article/view/59%0Ahttps://journal.lemlit.org/ojs/index.php/aj/article/download/59/ 84

Nathania, A., & Purwanto, M. (2023). The Determinant Influence of Financial Distress in the Food and Beverage Sector. Media Mahardika , 18 (1), 28–42.

Noviyana, S., Koranti, K., Sriyanto, S., & Wijaya, AN (2024). The Influence of Liquidity, Leverage and Profitability Ratios on Financial Distress in Transportation Sub-Sector Companies. Jesya , 7 (1), 853–862. https://doi.org/10.36778/jesya.v7i1.1493

Parlina*, ND, & Maiyaliza, M. (2023). The Analysis of Profitability Financial Ratios at Companies Engaged in Property Development and Management. Journal of Finance and Banking Science (IF) , 12 (2), 281–290. https://doi.org/10.34010/jika.v12i2.9696

Phantohan, Hutabarat, K., & Cendana, M. (2023). The effect of sales growth, net profit, liquidity and leverage on financial distress (study of manufacturing sector companies listed on the IDX in 2018 – 2021), 7 , 522–536.

Purwanti, D. (2022). Analysis of the Effect Liquidity, Leverage, Profitability and Sales Growth on Financial Distress (Altman Z-Score) (Empirical Study of Retail Sub - Sector Companies Listed on the Indonesia Stock Exchange (IDX) 2015-2019. Journal of Economics, Finance And Management Studies , 05 (03), 721–729. https://doi.org/10.47191/jefms/v5-i3-23

Rachman, A. (2023). Latest! World & Indonesian Economic Conditions from Foreign Perspectives. CNBC INDONESIA . Retrieved from https://www.cnbcindonesia.com/news/20230731140914-4-458767/terbaru-condition-economic-dunia-ri-dari-kacamata-asing

Rahmentio, Y., Rahman, A., Putra, DG, & Aprayuda, R. (2022). Will the Effects of the Covid-19 Pandemic Increase Technology Company Stock Returns ? Ecogen Journal , 5 (2), 194. https://doi.org/10.24036/jmpe.v5i2.13107

Sa'diah, NH, Manik, E., & ... (2023). The Effect of Liquidity and Profitability on Company Value: Study on Cement Companies Listed on The Indonesia Stock Exchange For The 2016-2020 Period. Acman: Accounting and… , 3 (1), 42–48.

Saputri, NMN, & Padnyawati, KD (2021). The Influence of Profitability, Liquidity and Leverage on Financial Distress (Case Study of Property and Real Estate Sector Companies Listed on the Indonesian Stock Exchange for the 2017 - 2019 Period). Hita Accounting and Finance, Indonesian Hindu University , (April), 699–730.

Setiawati, S. (2023). The Fed Raises Interest Rates, What Will Happen to JCI? CNBC INDONESIA . Retrieved from https://www.cnbcindonesia.com/research/20230323193957-128-424004/the-fed-naikin-suku-bunga-how-nasib-ihsg

Sinurat, M., & Cahyadi, W. (2021). Leverage Determinants Analysis Of Manufacturing Companies Registered in Indonesia Stock Exchange 2014-2018. Journal of Capital Markets and Business , 3 (1), 105–122. https://doi.org/10.37194/jpmb.v3i1.64

Sitanggang, M., Handayani, D., & Sari, IR (2021). The influence of profitability, leverage, and company sales growth on financial distress conditions in property and real estate companies on the Indonesian stock exchange in 2014-2018. Journal of Economic Paradigms , 16 (4), 739–748. https://doi.org/10.22437/jpe.v16i4.13088

Sitorus, FD, Hernandy, F., Triskietanto, W., Angela, A., & Vanessa, V. (2022). The Influence of Liquidity, Leverage, Profitability and Company Size on Financial Distress in Consumer Goods Companies Listed on the IDX in 2016-2020. Owner , 6 (1), 85–98. https://doi.org/10.33395/owner.v6i1.530

Suranta, E., Satrio, MAB, & Midiastuty, PP (2023). Effect of Investment, Free Cash Flow, Earnings Management, Interest Coverage Ratio, Liquidity, and Leverage on Financial Distress. Ilomata International Journal of Tax and Accounting , 4 (2), 283–295. https://doi.org/10.52728/ijtc.v4i2.714

Utami, IW, & Dewi Kartika, TP (2019). Determinants of Financial Distress in Property and Real Estate Companies. The Indonesian Accounting Review , 9 (1), 109. https://doi.org/10.14414/tiar.v9i1.1705

Widhiastuti, R., & Rahayu, S. (2022). The Role of Financial Distress in Mediating Accounting Conservatism Practices. ACCRUAL: Journal of Accounting , 13 (2), 201–213. https://doi.org/10.26740/jaj.v13n2.p201-213

Zhafirah, A., & Majidah, &. (2019). Analysis of the Determinants of Financial Distress (Empirical Study of Textile and Garment Subsector Companies for the 2013-2017 Period). Journal of Accounting and Finance Research , 7 (1), 195–202. https://doi.org/10.17509/jrak.v7i1.15497