The Influence of the Financial Ratio to the Prevention of Bankruptcy in Cigarette Manufacturing Companies Sub Sector

Authors

  • Shendy Amalia*, Nadrata Eriani Fadjriah, Nugi Mohammad Nugraha

Abstract

The financial statements of the cigarette industry companies experience various difficulties as a result of the government issuing a policy on cigarette tax increases. This has an impact on the instability of cash flow, income and the amount of debt from the overall operations of the company. This study aims to determine the effect of the current ratio, profit and the amount of debt on the bankruptcy condition of the cigarette sub-sector companies listed on the Stock Exchange in the 2015-2018 period. This research method uses saturated sampling so that all members of the population are used as samples. Panel data regression and a number of classical assumption tests plus a t-test and F-test are used in obtaining an appropriate conclusion. The results showed that the current ratio, profit and total debt simultaneously have a significant effect on the condition of the company's bankruptcy. But the test results are partial; current ratio and profit have a significant effect, while for the amount of debt does not have a significant effect on the company's bankruptcy conditions.

Published

2020-10-16

Issue

Section

Articles