Abstract
Identifying financial distress condition is important because it can be an early warning system before bankcruptcy. This condition can be predicted using models that have developed by many researchers. The purpose of this research is to describe and analyze the effect of the return on assets, current ratio, debt to equity ratio and total asset turnover towards condition of financial distress in service sector listed in Indonesian Stock Exchange (IDX) in the year 2009-2014. The data analysis technique is logistic regression. The sample consist of 60 data observed of the firms with positive earning before tax for the two consecutive years and 60 data observed of the firms with negative earning before tax for the two consecutive years. The result of this research shows thatreturn on asset significantly affects to condition of company financial distress. Whereas debt to equity ratio, current ratio and total asset turnover do not significantly influenceto condition of company financial distress.So, companies should pay attention to productivity in the future to maintain the effectiveness of the management.
Highlights
Identifying a financial distress condition is important because it can become an early warning system before the bankruptcy. This condition can be predicted using models that have been developed by many researchers
The purpose of this research is to describe and analyze the effects of the return on assets, current ratio, debt to equity ratio and total asset turnover on the condition of financial distress in service sector listed in Indonesian Stock Exchange (ISE) in the year 2009-2014
The sample consist of 60 data observed of the firms with positive earnings before tax for the two consecutive years and 60 data observed of the firms with negative earnings before tax for the two consecutive years
Summary
Dalam menghadapi Masyarakat Ekonomi ASEAN (MEA), Indonesia bisa mengandalkan sektor jasa untuk dapat bersaing dengan negaranegara di kawasan Asia Tenggara. Pemahaman dan analisis terhadap kemungkinan terjadinya kesulitan keuangan (financial distress) sangat perlu dilakukan untuk membenahi kondisi perekonomian khususnya dalam sektor jasa. Model prediksi kebangkrutan yang bermunculan merupakan antisipasi dan sistem peringatan dini (early warning system) terhadap financial distress karena model tersebut dapat digunakan sebagai sarana untuk mengidentifikasikan bahkan memperbaiki kondisi sebelum sampai pada kondisi krisis atau kebangkrutan. Di dalam penelitian lain yang dilakukan oleh Evanny Indri Hapsari (2012) dinyatakan bahwa return on asset (ROA) memengaruhi kondisi financial distress pada perusahaan manufaktur yang terdaftar di BEI periode tahun 2007 – 2010, karena hasil hipote-.
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