CEO Overconfidence as Moderator of Sales Growth, Interest Coverage, Fixed Asset Intensity to Financial Distress
Abstract
This study seeks to explore the influence of certain factors, namely company growth, interest coverage ratio, and fixed asset intensity, on a company's financial health or distress. We pay special attention to the potential role of CEO overconfidence as a variable that might change or moderate these influences. Drawing from a quantitative approach, we used publicly available financial statements of primary consumer goods companies listed on the Indonesia Stock Exchange from 2017 to 2021. Our findings suggest that company growth and the value of fixed assets play roles in determining financial distress, but the interest coverage ratio does not. Moreover, when factoring in CEO overconfidence, we found it changes the way company growth and fixed assets relate to financial distress. Yet, this CEO trait doesn’t alter the relationship between the interest coverage ratio and financial distress.
Keywords: company growth, interest coverage ratio, fixed asset intensity, ceo overconfidence, financial distress
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References
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Krantz, M., & Johnson, R. R. (2020). Investment Banking For Dummies. John Wiley & Sons, Inc.
Liang, Q., Ling, L., Tang, J., Zeng, H., & Zhuang, M. (2020). Managerial overconfidence, firm transparency, and stock price crash risk: Evidence from an emerging market. China Finance Review International, 10(3), 271–296. https://doi.org/10.1108/CFRI-01-2019-0007
Meryana, & Setiany, E. (2021). The Effect Of Investment, Free Cash Flow, Earnings Management and Interest Coverage Ratio On Financial Distress. Journal Of Social Science, 64–69. https://doi.org/10.46799/jss.v2i1.86
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Oktaviyani, R., & Munandar, A. (2017). Effect of Solvency, Sales Growth, and Institutional Ownership on Tax Avoidance with Profitability as Moderating Variables in Indonesian Property and Real Estate Companies. Binus Business Review, 8(3), 183. https://doi.org/10.21512/bbr.v8i3.3622
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Sugiono, A., & Untung, E. (2016). Panduan Praktis Dasar Analisa Laporan Keuangan. PT Grasindo.
Sulastri, E., & Zannati, R. (2018). Prediksi financial distress dalam mengukur kinerja perusahaan manufaktur. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 1(1), 27–36. https://doi.org/10.36407/jmsab.v1i1.17
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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.
Widiyantoro, C. S., & Sitorus, R. R. (2019). Pengaruh Transfer Pricing Dan Sales Growth Terhadap Tax Avoidance Dengan Profitabilitas Sebagai Variabel Moderating. Media Akuntansi Perpajakan, 4(2), 01–10. https://doi.org/10.52447/map.v5i1.4182
Yulianti, V., & Ramadhan, Y. (2022). Pengaruh Struktur Modal, Profitabilitas dan Ukuran Perusahaan Terhadap Nilai Perusahaan. Jurnal Ilmiah Indonesia, 7(3). https://doi.org/10.36418/syntax-literate.v7i2.6336
Yustisi, Y. P., & Putri, D. D. (2021). Manajemen Laba Yang Dipengaruhi Oleh Managerial Overconfidence Dan Kepemilikan Keluarga. Journal Ekombis Review, 9(1), 121–134. https://doi.org/10.37676/ekombis.v9i1.1271
Akmalia, A. (2020). Pengaruh Struktur Modal, Struktur Aset Dan Profitabilitas Terhadap Potensi Terjadinya Financial Distress Perusahaan (Studi pada Perusahaan Manufaktur Sektor Aneka Industri yang Terdaftar di Bursa Efek Indonesia periode 2014-2017). Business Management Analysis Journal (BMAJ), 3(1), 1–21. https://doi.org/10.24176/bmaj.v3i1.4613
Altman, E. I. (1968). Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. The Journal of Finance, 23(4), 589–609.
Amanda, Y., & Tasman, A. (2019). Pengaruh Likuiditas, Leverage, Sales Growth dan Ukuran Perusahaan Terhadap Financial Distress Pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI) Periode 2015- 2017. Jurnal Ecogen, 2(3), 453–462. http://dx.doi.org/10.24036/jmpe.v2i3.7417
Ambarukmi, K. T., Diana, N., & Adhikara, A. (2017). Pengaruh Size, Leverage, Profitability, Capital inttensity Ratio Dan Activity Ratio Terhadap Effective Tax Rate (ETR) (Studi Empiris Pada Perusahaan LQ-45 Yang Terdaftar Di BEI Selama Periode 2011- 2015). E_Junal Ilmiah Riset Akuntansi, 6(17), 13–26.
Ananda, Y. Y., Permana, A. H., & Pohan, E. R. (2022). Determinasi Financial Distress Pada Perusahaan Properti Dan Real Estate Di Indonesia Sebuelum dan Selama Bencana Covid-19. Syntax Idea, 4(2). https://doi.org/ 10.36418/syntax-idea.v4i2.1767%0D
Brigham, E. F., & Daves, P. R. (2007). Intermediate financial management. The British Accounting Review.
Brigham, E. F., & Houston, J. F. (2014). Dasar-Dasar Manajemen Keuangan (11th ed). Salemba Empat.
Bruner, R. F. (2004). Applied Mergers and Acquisitions. Wiley Finance.
Damajanti, A., Wulandari, H., & Rosyati. (2021). Pengaruh Rasio Keuangan Terhadap Financial Distress Pada Perusahaan Sektor Perdagangan Eceran Di Bursa Efek Indonesia Tahun 2015-2018. SOLUSI : Jurnal Ilmiah Bidang Ilmu Ekonomi, 19(1), 29–44. http://dx.doi.org/10.26623/slsi.v19i1.2998
Edastami, M., & Kusumadewi, Y. (2022). Pengaruh kepemilikan institusional, kepemilikan publik dan profitabilitas terhadap penghindaran pajak dengan manajemen laba sebagai variabel intervening. Fair Value : Jurnal Ilmiah Akuntansi Dan Keuangan, 4(9), 3764–3772. https://doi.org/10.32670/fairvalue.v4i9.1544
Ghayour, F., Farahany, M. H., & Shahi, S. (2022). The Efficiency of Inventory Management and Financial Distress: The Interactive Role of Management Behavioral Strains. Iranian Journal of Management Studies (IJMS), 15(2), 253–269. 10.22059/IJMS.2021.319848.674456
Habib, A., Sun, J., Cahan, S., & Hossain, M. (2012). CEO Overconfidence, Earnings Management and the Global Financial Crisis. University of Auckland and Curtin Business School.
Hai, B. lu, Yin, X. M., Xiong, J., & Chen, J. (2022). Could more innovation output bring better fnancial performance? The role of fnancial constraints. Financial Innovation, 8(6), 1–26. https://doi.org/10.1186/s40854-021-00309-2
Hanafi, A. H. A., Md-Rus, R., & Mohd, K. N. T. (2021). Predicting Financial Distress In Malaysia And Its Effect On Stock Returns. The International Journal of Banking and Finance, 16(2), 81–110. https://doi.org/10.32890/ ijbf2021.16.2.4
Hery. (2015). Analisis Laporan Keuangan. Center for Academic Publishing Service.
Hidayah, I., & Umiah, Ri. (2022). Faktor–Faktor yang mempengaruhi Intensitas Aset Tetap, Profitabilitas, Leverage, dan Size terhadap Manajemen Pajak (studi kasus pada sektor pertambangan yang terdaftar di BEI tahun 2018-2020). Jurnal SEKURITAS (Saham, Ekonomi, Keuangan Dan Investasi), 5(3), 222–237. http://dx.doi.org/10.32493/skt.v5i3.17580
Jensen, M. C., & Meckling, W. H. (1976). Theory Of The Firm : Managerial Behavior, Agency Costs And Ownership Structure. Journal of Financial Economics, 3, 305–360.
Kaplan, S. N., Sorensen, M., & Zakolyukina, A. A. (2021). What Is CEO Overconfidence? Evidence from Executive Assessments. Chicago Booth Paper, 20(22). https://doi.org/10.1016/j.jfineco.2021.09.023
Krantz, M., & Johnson, R. R. (2020). Investment Banking For Dummies. John Wiley & Sons, Inc.
Liang, Q., Ling, L., Tang, J., Zeng, H., & Zhuang, M. (2020). Managerial overconfidence, firm transparency, and stock price crash risk: Evidence from an emerging market. China Finance Review International, 10(3), 271–296. https://doi.org/10.1108/CFRI-01-2019-0007
Meryana, & Setiany, E. (2021). The Effect Of Investment, Free Cash Flow, Earnings Management and Interest Coverage Ratio On Financial Distress. Journal Of Social Science, 64–69. https://doi.org/10.46799/jss.v2i1.86
Muzharoatiningsih, & Hartono, U. (2022). Pengaruh Rasio Keuangan, Sales Growth, Dan Ukuran Perusahaan Terhadap Financial Distress Pada Sektor Industri Barang Konsumsi Di BEI Periode 2017-2020. Jurnal Ilmu Manajemen, 10(3), 747–758. https://doi.org/10.26740/jim.v10n3.p747-758
Nailufar, F., Sufitrayati, & Badaruddin. (2018). Pengaruh Laba dan Arus Kas Terhadap Kondisi Financial Distress Pada Perusahaan Non Bank Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Penelitian Ekonomi Akuntansi, 2(2), 147–162. ttps://doi.org/10.33059/jensi.v2i2.943
Nurcahyani, C., & Rahmawati, I. P. (2020). Pengaruh CEO Overconfidence Terhadap Manajemen Laba Riil Dengan Kualitas Audit Sebagai Pemoderasi (Studi Pada Sub Sektor Industri Dasar Dan Kimia Tahun 2015- 2018). Jurnal Akuntansi Dan Manajemen Mutiara Madan, 8(2), 110–133.
Oktaviyani, R., & Munandar, A. (2017). Effect of Solvency, Sales Growth, and Institutional Ownership on Tax Avoidance with Profitability as Moderating Variables in Indonesian Property and Real Estate Companies. Binus Business Review, 8(3), 183. https://doi.org/10.21512/bbr.v8i3.3622
Prasetya, E. R., & Oktavianna, R. (2021). Financial Distress Dipengaruhi Oleh Sales Growth Dan Intellectual Capital. Jurnal Akuntansi Berkelanjutan Indonesia, 4(2), 170–182. http://dx.doi.org/10.32493/JABI.v4i2.y2021.p170-182
Ramadhan, Y., & Marindah, M. (2021). Financial Distress Analysis in an Indonesian Textile Company. KnE Social Sciences, 2021, 602–621. https://doi.org/10.18502/kss.v5i5.8846
Salsabila, N. E. P. A. (2020). Pengaruh Overconfidence, Illusion Of Control, Loss Aversion Bias, Dan Regret Aversion Bias Terhadap pengambilan Keputusan INVESTASI. STIE Perbanas Surabaya.
Sanchiani, D., & Bernawati, Y. (2018). Pengaruh Kinerja Keuangan Dan Pertumbuhan PerusahaanTerhadap Kondisi Financial Distress (Studi Pada Perusahaan Tekstil Dan Garmen Yang Terdaftar Di Bursa Efek Indonesia Periode 2012-2016). Jurnal Manajemen Bisnis Indonesia, 5(3), 378–392. https://doi.org/10.31843/jmbi.v5i3.174
Saputra, A. J., & Salim, S. (2020). Pengaruh Profitabilitas, Leverage, Firm Size, Dan Sales Growth Terhadap Financial Distress. Jurnal Multiparadigma Akuntansi Tarumanagara, 2(1), 262–269. https://doi.org/10.24912/jpa.v2i1.7154
Shetty, S. H., & Vincent, T. N. (2021). The Role of Board Independence and Ownership Structure in Improving the Efficacy of Corporate Financial Distress Prediction Model: Evidence from India. Journal of Risk and Financial Management, 14(333), 1–13. https://doi.org/10.3390/jrfm14070333
Sugiono, A., & Untung, E. (2016). Panduan Praktis Dasar Analisa Laporan Keuangan. PT Grasindo.
Sulastri, E., & Zannati, R. (2018). Prediksi financial distress dalam mengukur kinerja perusahaan manufaktur. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 1(1), 27–36. https://doi.org/10.36407/jmsab.v1i1.17
Sumunar, K. I., & Djakman, C. D. (2020). CEO Overconfidence, ESG Disclosure, And Firm Risk. Jurnal Akuntansi Dan Keuangan Indonesia, 17(1), 1–21. 10.21002/jaki.2020.01
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.
Widiyantoro, C. S., & Sitorus, R. R. (2019). Pengaruh Transfer Pricing Dan Sales Growth Terhadap Tax Avoidance Dengan Profitabilitas Sebagai Variabel Moderating. Media Akuntansi Perpajakan, 4(2), 01–10. https://doi.org/10.52447/map.v5i1.4182
Yulianti, V., & Ramadhan, Y. (2022). Pengaruh Struktur Modal, Profitabilitas dan Ukuran Perusahaan Terhadap Nilai Perusahaan. Jurnal Ilmiah Indonesia, 7(3). https://doi.org/10.36418/syntax-literate.v7i2.6336
Yustisi, Y. P., & Putri, D. D. (2021). Manajemen Laba Yang Dipengaruhi Oleh Managerial Overconfidence Dan Kepemilikan Keluarga. Journal Ekombis Review, 9(1), 121–134. https://doi.org/10.37676/ekombis.v9i1.1271
Published
2023-07-30
How to Cite
SLAMET, Franki; RAMADHAN, Yanuar.
CEO Overconfidence as Moderator of Sales Growth, Interest Coverage, Fixed Asset Intensity to Financial Distress.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 18, n. 2, p. 308-321, july 2023.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/101079>. Date accessed: 02 nov. 2024.
doi: https://doi.org/10.24843/JIAB.2023.v18.i02.p08.
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