Abstract
This study aims to empirically examine the factors that influence Financial Distress in Property and Real Estate Companies. This study was tested with four independent variables, namely Liquidity (Current Ratio), Leverage (Debt Equity Ratio), Firm Size (ln of Total Assets), and Profitability (Return on Assets) using purposive sampling technique the authors chose seventeen companies as samples. This study uses panel data analysis obtained from financial reports and Annual Reports for 5 years. This study uses secondary data with the help of the Eviews 9 application. The results found that the Leverage Variable (Debt Equity Ratio) has a positive and significant influence on Financial Distress while Liquidity (Current Ratio), Company Size (ln of Total Assets), and Profitability Variables (Return). on Assets) has a negative and significant effect on Financial Distress.
Highlights
In the current era of globalization, companies are required to be more competitive by showing various advantages to dominate the world market because free trade makes companies compete in the domestic sphere and compete with foreign companies(Wahyuningsih and Suryanawa, 2012)
The F test is used to compare the common individuals and/or time are reflected through intercepts, in effects model which assumes that the intercept model for all the Random Effects Model, these differences are accommodated cross-section units is the same as the fixed-effect model which assumes that it is different from the cross-section
Based on the results of the regression analysis that has Profitability on Financial Distress been carried out, the regression coefficient value is 9.659863, the Liquidity, leverage, company size, and profitability on t-count value is -3.85, and the significant probability is 0.0002 financial distress in Real Estate Companies can be seen in the R- which is smaller than the significant level set =0.05
Summary
In the current era of globalization, companies are required to be more competitive by showing various advantages to dominate the world market because free trade makes companies compete in the domestic sphere and compete with foreign companies(Wahyuningsih and Suryanawa, 2012). The growth rate of world economic conditions is progressing quite rapidly every year, various ways are carried out by business actors to maintain and develop competitive advantages with their competitors (Horne, JC and Wachowicz, 2007). The going concern assumption is used by a business entity in running its business. An entity is considered capable of maintaining its business in the long term and will not be liquidated in the short term (Prabowo & Wibowo, 2017). The ability of management in a company to keep the company running will prevent the company from financial distress which can lead to business bankruptcy in the future
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
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 callMore From: International Journal of Business and Social Science Research
Disclaimer: 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.
