Predicting Financial Distress in Indonesia's Retail Industry
Abstract
The condition of a healthy company is an ideal representation for all parties, both internal and external to the company. However, at times, there are moments when a company does not operate according to plan and may experience financial difficulties (financial distress). The threat of financial distress requires the company to have the appropriate strategy to anticipate conditions that may cause financial problems for the company. To predict financial distress, it can be analyzed from the financial ratios of the company. In this study, the researcher used operating capacity, profitability, leverage, and cash flow as independent variables and examined how they are related in predicting financial distress. The study used the entire population of retail sector companies in Indonesia with an observation period from 2019 to 2022. The retail sector was the focus of this research because in 2021, several retail sectors were in financial distress and even declared bankrupt. The conclusion of this research is that all four variables, namely operating capacity, profitability, leverage, and cash flow, have an effect in predicting financial distress. Operating capacity, profitability, and cash flow show a negative direction in their effect on predicting financial distress, while leverage shows a positive direction in its effect on financial distress.
Keywords: financial distress, operating capacity, profitability, leverage, cash flow
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References
REFERENCE
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Agustini, N. W., & Wirawati, N. G. P. (2019). Pengaruh Rasio Keuangan Pada Financial Distress Perusahaan Ritel Yang Terdaftar di Bursa Efek Indonesia (BEI). E-Jurnal Akuntansi, 26(1), 251–280. https://doi.org/10.24843/eja.2019.v26.i01.p10
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Christine, D., Wijaya, J., Chandra, K., Pratiwi, M., Lubis, M. S., & Nasution, I. A. (2019). Pengaruh Profitabilitas, Leverage, Total Arus Kas dan Ukuran Perusahaan terhadap Financial Distress pada Perusahaan Property dan Real Estate yang Terdapat di Bursa Efek Indonesia Tahun 2014-2017. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 2(2), 340–350. https://doi.org/10.36778/jesya.v2i2.102
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Ghozali, P. H. I. (2018). Aplikasi Analisis Multivariate (Edisi 9). Badan Penerbit Universitas Diponegoro.
Handayati, P., Izzalqurny, T. R., Fauzan, S., & Shobah, N. (2022). The phenomenon of financial distress of manufacturing companies in Indonesia during the Covid-19 Pandemic. International Journal of Research in Business and Social Science (2147- 4478), 11(9), 166–173. https://doi.org/10.20525/ijrbs.v11i9.2205
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Jiming, L., & Weiwei, D. (2011). An Empirical Study on the Corporate Financial Distress Prediction Based on Logistic Model: Evidence from China’s Manufacturing Industry. International Journal of Digital Content Technology and Its Applications, 5(6), 368–379. http://dx.doi.org/10.4156/jdcta.vol5.issue6.44
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Larasati, H., & Wahyudin, A. (2019). The Effect of Liquidity, Leverage, and Operating Capacity on Financial Distress with Managerial Ownership as a Moderating Variable. Accounting Analysis Journal, 8(3), 214–220. https://doi.org/10.15294/aaj.v8i3.30176
Luu Thu, Q. (2023). Impact of earning management and business strategy on financial distress risk of Vietnamese companies. Cogent Economics and Finance, 11(1), 1–22. https://doi.org/10.1080/23322039.2023.2183657
Mahaningrum, A. A. I. A., & Merkusiwati, N. K. L. A. (2020). Pengaruh Rasio Keuangan pada Financial Distress. E-Jurnal Akuntansi, 30(8), 1969–1984. https://doi.org/10.24843/eja.2020.v30.i08.p06
Maysaroh, W., Suhendro, S., & Dewi, F. G. (2022). Pengaruh Kinerja Keuangan Terhadap Financial Distress Perusahaan Asuransi di Indonesia Sebelum dan Saat Pandemi Covid-19. E-Jurnal Akuntansi, 32(3), 788–802. https://doi.org/10.24843/eja.2022.v32.i03.p18
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Nukmaningtyas, F., & Worokinasih, S. (2018). Penggunaan Rasio Profitabilitas, Likuiditas, Leverage dan Arus Kas Untuk Memprediksi Financial Distress ( Studi Pada Perusahaan Sektor Aneka Industri Yang Terdaftar Di Bursa Efek Indonesia Periode 2013 - 2016 ). Jurnal Administrasi Bisnis (JAB), 61(2), 136–143. http://administrasibisnis.studentjournal.ub.ac.id/index.php/jab/issue/view/122
Phan, T. D., Hoang, T. T., & Tran, N. M. (2022). Cash flow and financial distress of private listed enterprises on the Vietnam stock market: A quantile regression approach. Cogent Business and Management, 9(1), 1–14. https://doi.org/10.1080/23311975.2022.2121237
Puspaningsih, A., Hudayati, A., & Zulkifri, M. (2023). The Effect of Corporate Governance and Leverage on Financial Distress Measured by G- score. Review of Integrative Business and Economics Research, 13(3), 291–304.
Safiq, M., Selviana, R., & Kusumastati, W. W. (2020). Financial and nonfinancial factors affecting future cashflow and their impacts on financial distress. International Journal of Research in Business and Social Science (2147- 4478), 9(5), 212–226. https://doi.org/10.20525/ijrbs.v9i5.859
Sehgal, S., Mishra, R. K., Deisting, F., & Vashisht, R. (2021). On the determinants and prediction of corporate financial distress in India. Managerial Finance, 47(10), 1428–1447. https://doi.org/10.1108/MF-06-2020-0332
Sembiring, L. J. (2021). Centro Pailit, Giant Tutup, Begini Ramalan Sektor Ritel RI! CNBC Indonesia, May 31, 2021.
Srikalimah. (2017). Pengaruh Profitabilitas, Likuiditas dan Leverage Dalam Memprediksi Financial Distress (Studi Empiris Pada Perusahaan Manufaktur yang Terdaftar di BEI Periode 2009-2013). JURNAL AKUNTANSI & EKONOMI FE. UN PGRI Kediri, 2(1), 43–66.
Suprihatin, N. S., & Giftilora, M. (2020). Penggunaan Laba, Arus Kas Dan Leverage Dalam Memprediksi Financial Distress. JAD : Jurnal Riset Akuntansi & Keuangan Dewantara, 3(2), 141–152. https://doi.org/10.26533/jad.v3i2.694
Sutra, F. M., & Mais, R. G. (2019). Faktor-Faktor yang Mempengaruhi Financial Distress dengan Pendekatan Altman Z-Score pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia Tahun 2015-2017. Jurnal Akuntansi Dan Manajemen, 16(01), 34–72. https://doi.org/10.36406/jam.v16i01.267
Tran, T., Nguyen, N. H., Le, B. T., Thanh Vu, N., & Vo, D. H. (2023). Examining financial distress of the Vietnamese listed firms using accounting-based models. PLoS ONE, 18(5 May), 1–18. https://doi.org/10.1371/journal.pone.0284451
Widhiari, N. L. M. A., & Merkusiwati, N. K. L. A. (2015). Pengaruh Rasio Likuiditas, Leverage, Operating Capacity dan Sales Growth Terhadap Financial Distress. E-Jurnal Akuntansi Universitas Udayana, 11(2), 456–469.
Yazdanfar, D., & Öhman, P. (2020). Financial distress determinants among SMEs: empirical evidence from Sweden. Journal of Economic Studies, 47(3), 547–560. https://doi.org/10.1108/JES-01-2019-0030
Aderin, A., & Amede, O. (2022). Cash Flow Patterns and Financial Distress Prediction. 12(1), 45–57.
Agustini, N. W., & Wirawati, N. G. P. (2019). Pengaruh Rasio Keuangan Pada Financial Distress Perusahaan Ritel Yang Terdaftar di Bursa Efek Indonesia (BEI). E-Jurnal Akuntansi, 26(1), 251–280. https://doi.org/10.24843/eja.2019.v26.i01.p10
Aisyah, N. N., Kristanti, F. T., & Zultilisna, D. (2017). Pengaruh Rasio Likuiditas, Rasio Aktivitas, Rasio Profitabiltas, dan Rasio Leverage Terhadap Financial Distress (Studi pada Perusahaan Tekstil dan Garmen yang Terdaftar di Bursa Efek Indonesia Tahun 2011-2015). E- Proceeding Of Management, 4(1), 411–419.
Bui, T. D., & Thach, N. N. (2023). How Vietnamese Export Firms Faced Financial Distress during COVID-19? A Bayesian Small Sample Analysis. Economies, 11(2), 1–12. https://doi.org/10.3390/economies11020041
Christine, D., Wijaya, J., Chandra, K., Pratiwi, M., Lubis, M. S., & Nasution, I. A. (2019). Pengaruh Profitabilitas, Leverage, Total Arus Kas dan Ukuran Perusahaan terhadap Financial Distress pada Perusahaan Property dan Real Estate yang Terdapat di Bursa Efek Indonesia Tahun 2014-2017. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 2(2), 340–350. https://doi.org/10.36778/jesya.v2i2.102
Dwiantari, R. A., Gede, L., & Artini, S. (2021). The Effect of Liquidity, Leverage, and Profitability on Financial Distress (Case Study of Property and Real Estate Companies on the IDX 2017-2019). American Journal of Humanities and Social Sciences Research, 5(1), 367–373. www.ajhssr.com
Ghozali, P. H. I. (2018). Aplikasi Analisis Multivariate (Edisi 9). Badan Penerbit Universitas Diponegoro.
Handayati, P., Izzalqurny, T. R., Fauzan, S., & Shobah, N. (2022). The phenomenon of financial distress of manufacturing companies in Indonesia during the Covid-19 Pandemic. International Journal of Research in Business and Social Science (2147- 4478), 11(9), 166–173. https://doi.org/10.20525/ijrbs.v11i9.2205
Hery. (2021). Analisis Laporan Keuangan: Integrated And Comprehesive Edition. Gramedia Widiasarana Indonesia.
Jiming, L., & Weiwei, D. (2011). An Empirical Study on the Corporate Financial Distress Prediction Based on Logistic Model: Evidence from China’s Manufacturing Industry. International Journal of Digital Content Technology and Its Applications, 5(6), 368–379. http://dx.doi.org/10.4156/jdcta.vol5.issue6.44
Kassidy, C. L., & Handoko, J. (2022). Prediksi Financial Distress Sebelum dan Selama Masa Pandemi Covid-19. E-Jurnal Akuntansi, 32(10), 3005. https://doi.org/10.24843/eja.2022.v32.i10.p08
Kumar, S. (2023). Grover ’ s G-Score Analysis : An Indian Perspective on Financial Distress. The IUP Journal of Financial Risk Management, 20(1), 40–50.
Larasati, H., & Wahyudin, A. (2019). The Effect of Liquidity, Leverage, and Operating Capacity on Financial Distress with Managerial Ownership as a Moderating Variable. Accounting Analysis Journal, 8(3), 214–220. https://doi.org/10.15294/aaj.v8i3.30176
Luu Thu, Q. (2023). Impact of earning management and business strategy on financial distress risk of Vietnamese companies. Cogent Economics and Finance, 11(1), 1–22. https://doi.org/10.1080/23322039.2023.2183657
Mahaningrum, A. A. I. A., & Merkusiwati, N. K. L. A. (2020). Pengaruh Rasio Keuangan pada Financial Distress. E-Jurnal Akuntansi, 30(8), 1969–1984. https://doi.org/10.24843/eja.2020.v30.i08.p06
Maysaroh, W., Suhendro, S., & Dewi, F. G. (2022). Pengaruh Kinerja Keuangan Terhadap Financial Distress Perusahaan Asuransi di Indonesia Sebelum dan Saat Pandemi Covid-19. E-Jurnal Akuntansi, 32(3), 788–802. https://doi.org/10.24843/eja.2022.v32.i03.p18
Miswaty, M., & Novitasari, D. (2023). Pengaruh Operating Capacity, Sales Growth, dan Arus Kas Operasi Terhadap Financial Distress. Jurnal Aplikasi Bisnis Dan Manajemen, 9(2), 583–594. https://doi.org/10.17358/jabm.9.2.583
Nukmaningtyas, F., & Worokinasih, S. (2018). Penggunaan Rasio Profitabilitas, Likuiditas, Leverage dan Arus Kas Untuk Memprediksi Financial Distress ( Studi Pada Perusahaan Sektor Aneka Industri Yang Terdaftar Di Bursa Efek Indonesia Periode 2013 - 2016 ). Jurnal Administrasi Bisnis (JAB), 61(2), 136–143. http://administrasibisnis.studentjournal.ub.ac.id/index.php/jab/issue/view/122
Phan, T. D., Hoang, T. T., & Tran, N. M. (2022). Cash flow and financial distress of private listed enterprises on the Vietnam stock market: A quantile regression approach. Cogent Business and Management, 9(1), 1–14. https://doi.org/10.1080/23311975.2022.2121237
Puspaningsih, A., Hudayati, A., & Zulkifri, M. (2023). The Effect of Corporate Governance and Leverage on Financial Distress Measured by G- score. Review of Integrative Business and Economics Research, 13(3), 291–304.
Safiq, M., Selviana, R., & Kusumastati, W. W. (2020). Financial and nonfinancial factors affecting future cashflow and their impacts on financial distress. International Journal of Research in Business and Social Science (2147- 4478), 9(5), 212–226. https://doi.org/10.20525/ijrbs.v9i5.859
Sehgal, S., Mishra, R. K., Deisting, F., & Vashisht, R. (2021). On the determinants and prediction of corporate financial distress in India. Managerial Finance, 47(10), 1428–1447. https://doi.org/10.1108/MF-06-2020-0332
Sembiring, L. J. (2021). Centro Pailit, Giant Tutup, Begini Ramalan Sektor Ritel RI! CNBC Indonesia, May 31, 2021.
Srikalimah. (2017). Pengaruh Profitabilitas, Likuiditas dan Leverage Dalam Memprediksi Financial Distress (Studi Empiris Pada Perusahaan Manufaktur yang Terdaftar di BEI Periode 2009-2013). JURNAL AKUNTANSI & EKONOMI FE. UN PGRI Kediri, 2(1), 43–66.
Suprihatin, N. S., & Giftilora, M. (2020). Penggunaan Laba, Arus Kas Dan Leverage Dalam Memprediksi Financial Distress. JAD : Jurnal Riset Akuntansi & Keuangan Dewantara, 3(2), 141–152. https://doi.org/10.26533/jad.v3i2.694
Sutra, F. M., & Mais, R. G. (2019). Faktor-Faktor yang Mempengaruhi Financial Distress dengan Pendekatan Altman Z-Score pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia Tahun 2015-2017. Jurnal Akuntansi Dan Manajemen, 16(01), 34–72. https://doi.org/10.36406/jam.v16i01.267
Tran, T., Nguyen, N. H., Le, B. T., Thanh Vu, N., & Vo, D. H. (2023). Examining financial distress of the Vietnamese listed firms using accounting-based models. PLoS ONE, 18(5 May), 1–18. https://doi.org/10.1371/journal.pone.0284451
Widhiari, N. L. M. A., & Merkusiwati, N. K. L. A. (2015). Pengaruh Rasio Likuiditas, Leverage, Operating Capacity dan Sales Growth Terhadap Financial Distress. E-Jurnal Akuntansi Universitas Udayana, 11(2), 456–469.
Yazdanfar, D., & Öhman, P. (2020). Financial distress determinants among SMEs: empirical evidence from Sweden. Journal of Economic Studies, 47(3), 547–560. https://doi.org/10.1108/JES-01-2019-0030
Published
2024-10-11
How to Cite
ANGELA, Aurora; OKTAVIANTI, Oktavianti; TANISON, Nindy.
Predicting Financial Distress in Indonesia's Retail Industry.
E-Jurnal Akuntansi, [S.l.], v. 34, n. 8, oct. 2024.
ISSN 2302-8556.
Available at: <https://ojs.unud.ac.id/index.php/akuntansi/article/view/114915>. Date accessed: 15 oct. 2024.
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