Analysis of the Effect Financial Ratios to Probability Default With the Risk as Moderation in Indonesian Building Construction Sub-Sector Companies
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 09
Abstract
The construction and building sector are one of the important sectors for Indonesia development and economy, furthermore it is also being an indicator in assessing the economic development of a country. The development in the sector of construction and building, which is currently facing intense market competition, is encouraging many companies to improve their management fundamentals. A company's inability to anticipate changes can result the decreasing in business volume, which eventually has a negative impact on profits and caused bankruptcy. The aim of this research is to analyze the effect of GPM, NPM, CR, DER, TIE, and TATO by moderating risk on probability default (probability of bankruptcy) in the construction and building companies in Indonesia which registered on the IDX for the 2014-2023 period. The research method used in this research is a panel data model to estimate the coefficient model. The result shows that Total Assets Turnover (TATO) has a positive and significant effect on the probability of bankruptcy. Meanwhile, Gross Profit Margin (GPM), Net Profit Margin (NPM), Current Ratio (CR), Debt Equity Ratio (DER), and Times Interest Earned (TIE), does not have a significant effect on the probability default in the construction and building companies.
Authors and Affiliations
Syanindita Prameswari , Adler Haymans Manurung,
Keywords
Related Articles
- EP ID EP744952
- DOI 10.47191/jefms/v7-i9-34
- Views 96
- Downloads 0
Impact of Risk Management on the Financial Performance of Listed Deposit Money Banks (DMBS) in Nigeria
This study looks at how risk management affects Nigeria's publicly listed deposit money institutions' financial performance (DMBs). The 10 commercial banks in Nigeria with licenses are being researched. The data used spa...
Social Media Marketing Strategy for a Leisure Hotel Using Digital Customer Experience Journey Approach: A Study on Innside by Melia Yogyakarta
Innside by Melia Yogyakarta is a 4-star business and leisure hotel owned by PT. Saraswanti Indoland Development. In 2018-2019, Innside by Melia Yogyakarta experienced a relatively rapid increase in revenue. However, the...
Analysis of Financial Management in MSEs: Planning, Controlling, Recording (Study at Selorejo Tourism Area, Malang Regency, Indonesia)
This study aims to analyze financial planning, control, and recording carried out by Micro Small Enterprises (MSEs) in the culinary field in Selorejo Tourism Area, Malang Regency, Indonesia. The research approach used is...
Importance of Economic Corridors as Driver of Regional Integration: South Caucasus and Central Asian Context
Developing and integrating regions is facilitated by economic corridors, which are strategically arranged infrastructure systems that include roads, railroads, ports, and pipelines. The importance of economic corridors i...
Dividend Policy Decisions and Share Price Volatility of Deposit Money Banks in Nigeria
Dividend policy and Share price movements are critical decision areas, which are one of the most important financial policies decision, not only from the viewpoint of financial institutions, but also from that of the sha...