The Influence of Return on Asset, Current Ratio, and Debt Equity Ratio on Financial Distress in Cement Sub-Sector Companies Registered on IDX Period 2013 - 2018

Authors

  • Novi Nurbadriyah*, Suci Lymartha, Wulan Griyandani Lenggana, Mutia Yulita Amarilis, Dudi Abdul Hadi

Abstract

The cement industry is one of the supports for infrastructure development in Indonesia. This industry contributes to supplying construction needs and also plays a role in accelerating the development of other industries. PT. Holcim Indonesia Tbk (SMCB) also feels the tight competition in the cement market. The movements of profit, assets, liabilities and equity of PT Holcim Indonesia (SMCB) for the period 2013-2018 that PT. Holcim Indonesia is experiencing financial distress. Financial distress is a situation in which finance of the company are in an unhealthy or crisis state. Financial distress can be predicted utilizing ratios such as profitability ratios (Return on Assets), liquidity ratios (Current Ratio), and leverage ratios (Debt Equity Ratio). Data panel regression is a method of data analysis used by researchers. The research results show that partially Return on assets has an impact on financial distress, current ratio has no impact on financial distress, and Debt equity ratio has no impact on financial distress in cement sub-sector companies listed on the Indonesia Stock Exchange in 2013 - 2018. While concurrently return on assets, current ratio, and debt to equity ratio simultaneously influence financial distress in cement sub-sector companies listed on the Indonesia Stock Exchange in 2013 - 2018.

Published

2020-12-05

Issue

Section

Articles