DETERMINANT OF FINANCIAL DISTRESS: THE CASE OF PULP & PAPER COMPANIES REGISTERED IN INDONESIA STOCK EXCHANGE
Article Sidebar
Abstract
The pulp and paper industry contributes to the Indonesian economy, especially to the non-oil and gas processing industry. Empirical research shows that pulp and paper companies listed on the Indonesia Stock Exchange (IDX) indicated financial distress. This study aims to find the effect of liquidity, leverage, profitability, and efficiency on pulp & paper companies' financial distress listed on the IDX. Using the Altman Z-score as a measure of financial distress, it was found that profitability, efficiency, and liquidity had a significant adverse effect on financial distress. In contrast, leverage had a significant positive effect on financial distress. Profitability has the greatest influence on financial distress, so it needs the primary intention of management.
Keywords: financial distress, liquidity, profitability, leverage, efficiency
Authors
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).