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

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 condition in which the company's finances are in an unhealthy or crisis state. Financial distress can be predicted using ratios such as profitability ratios (Return on Assets), liquidity ratios (Current Ratio), and leverage ratios (Debt Equity Ratio). The data analysis method used is panel data regression. The results show that partially Return on assets has an effect on financial distress, current ratio has no effect on financial distress, and Debt equity ratio has no effect on financial distress in cement sub-sector companies listed on the Indonesia Stock Exchange in 2013 - 2018. While simultaneously Return on assets, current ratio, and debt to equity ratio simultaneously affect financial distress in cement sub-sector companies listed on the Indonesia Stock Exchange in 2013 - 2018.