Abstract
For investors and creditors, the sustainability of an entity's business is an important matter, so that information about financial distress becomes significant in determining investment decisions and loans. Measuring the effect of good corporate governance mechanisms and financial ratios on business sustainability is the aim of this study. The sample includes 174 data on energy and raw material sector companies listed on the Indonesia Stock Exchange for the 2017-2019 period which are accessed using the refinitive database and the Indonesian stock exchange. Using logistic regression, this study finds that those that have no effect on financial distress are independent commissioners, liquidity ratios, and leverage ratios, while those that have a negative effect on financial distress are managerial ownership, institutional ownership, and profitability ratios. This finding implies the significance of profitability as a predictor of financial distress and institutional ownership and management in determining business sustainability.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
