The Effect of Leverage and Operating Capacity on Financial Distress with Profitability as a Moderating Variable

Risal Rinofah, Alfiatul Maulida, Chintya Anggraini Puspasari

Abstract


Financial distress is where the stage of a decline in the financial condition experienced by the company before bankruptcy occurred. This research aims to examine the effect of leverage and operating capacity on financial distress with profitability as a moderating variable. The population in this study are companies engaged in the pharmaceutical goods and consumption industry sector which are already listed on the Indonesia Stock Exchange. The sample in this study totaled 10 companies during the period 2015 to 2019. The sampling technique was carried out using a purposive sampling method. The analytical tool used in this study is Moderated Regression Analysis (MRA). Based on the results of research that has been done shows the conclusion that leverage has a negative and significant effect on financial distress, operating capacity has a positive and significant effect on financial distress and profitability is not able to moderate the leverage variable, operating capacity on financial distress

Full Text:

PDF

References


Sari, IP, Susbiyani, A., & Syahfrudin, A. (2019). ANALYSIS OF THE FACTORS AFFECTING THE CONDITION OF FINANCIAL DISTRESS IN COMPANIES LISTED ON THE IDX IN 2016-2018 (Empirical Study of Sub-Sector Manufacturing Companies Listed on the Indonesia Stock Exchange) . 9 (2), 191–203.

Maulida, IS, Moehaditoyo, SH, & Nugroho, M. (2018). Analysis of Financial Ratios to Predict Financial Distress in Manufacturing Companies Listed on the Indonesia Stock Exchange 2014-2016. Scientific Journal of Business Administration and Innovation , 2 (1). https://doi.org/10.25139/jai.v2i1.1149

Marsuni, N. S., & Yusuf, M. (2022). Concept of Financial Management in Islamic Perspective. INVOICE: JURNAL ILMU AKUNTANSI, 4(2), 346-352.

Marsuni, N. S., Said, D., & Indrijawati, A. (2022). Triple Button Line Implementation Through Corporate Social Responsibilty Program at PT. Semen Tonasa. Economos: Jurnal Ekonomi dan Bisnis, 5(2), 107-113.

Marsuni, N. S., Rasulong, I., & Adzim, F. (2022). Factors Affecting the Implementation of Good Government Governance (GGG) and Its Implications for Performance Accountability. Jurnal Ekonomi Balance, 18(1), 29-36.

Handayani, RD, Widiasmara, A., & Amah, N. (2019). The Effect of Operating Capacity and Sales Growth on Financial Distress with Profitability as a Moderating Variable. Simba Unipma , 137–151.

Lisiantara, GA, & Febrina, L. (2018). Liquidity, Leverage, Operating Capacity, Profitability, Sales Growth As Preditors of Financial Distress (Empirical Study of Manufacturing Companies Listed on the Indonesian Stock Exchange in 2013-2016). JOINT Proceedings , 764–772. https://www.unisbank.ac.id/ojs/index.php/sendi_u/article/view/6061

Andre, O., & Taqwa, S. (2014). The Effect of Profitability, Liquidity, and Leverage in Predicting Financial Distress. Journal of the Forum for Accounting Research , 2 (1), 293–312. http://ejournal.unp.ac.id/index.php/wra/article/view/6146

Muqorobin, A., & Nasir, M. (2009). Application of Financial Ratios as a Measuring Tool for Company Performance. Benefit Journal of Management and Business , 13 (1), 1–13.

Janna, M. (2018). The Effect of Liquidity and Leverage on Financial Distress with Profitability as a Moderating Variable (Study of Companies in the Consumer Goods Industry Sector on the Indonesia Stock Exchange in 2015-2017). Doctoral Dissertation, Maulana Malik Ibrahim State Islamic University .

Agusti, CP (2013). Analysis of Factors Affecting the Possibility of Financial Distress. Diponegoro University , 1–103.

Muhtar, Pearl; Aswan, A. (2017). The Effect of Financial Performance on the Occurrence of Financial Distress Conditions in Companies. Journal of Business Management and Informatics , 13 (3), 167–184.

Tazkia, AN (2019). The Influence of Corporate Governance, Leverage and Operating Capacity on the Financial Distress of Family Companies in Indonesia. Thesis , 1–136.

Kholidah, AN, Gumanti, TA, & Mufidah, A. (2016). Analysis of Financial Ratios in Predicting Financial Distress in Companies in the Basic Industry and Chemical Sector Listed on the BEI in 2011-2015. Bisma Journal of Business and Management , 10 (3), 279–291. www.kemenperin.go.id




DOI: https://doi.org/10.26618/inv.v5i1.10528

Refbacks

  • There are currently no refbacks.


Flag Counter