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

The Influence of the Marketing Mix on Customer Satisfaction and Loyalty of Adizaya Hydroponic, Kediri City, East Java

More than 38 hydroponic farmer groups with a total of 50,000 planting points spread across various areas of Kediri which has caused business competition to increase. Recognizing an increase in sales of lettuce along with...

Analysis of the Sukuk Market Development in the Countries of The World

Islamic securities sukuk, introduced as a new instrument of the global financial system in the 21st century, have grown rapidly in recent years. Interest in it is growing, as it showed a growth trend even during the glob...

Analysis of Determinants of Working Capital Credit Growth at Bank Persero in Indonesia

The purpose of this study is to analyze the effect of Third Party Funds (DPK), Non-Performing Loans (NPL), inflation, and BI Rate on the growth of working capital loans at Bank Persero in Indonesia. The analysis was cond...

Critical Notes on Crude Oil Mining as a Prime Mover of Timor Leste’s Economic: The Paradox of Abundance

After the international recognition of Timor-Leste's independence, the oil and gas sector has provided a very dominant contribution to the development of the economy and government. In fact, oil and natural gas revenues...

Study on Financial Capacity in Aquaculture Firms Listed on Vietnam’s Stock Market

The study investigates financial capacity through the capacity of management and the use of capital in aquaculture firms listed on Vietnam’s stock market, which is one of the basic characteristics of a joint stock compa...

Download PDF file
  • EP ID EP744952
  • DOI 10.47191/jefms/v7-i9-34
  • Views 32
  • Downloads 0

How To Cite

Syanindita Prameswari, Adler Haymans Manurung, (2024). Analysis of the Effect Financial Ratios to Probability Default With the Risk as Moderation in Indonesian Building Construction Sub-Sector Companies. Journal of Economics, Finance and Management Studies, 7(09), -. https://europub.co.uk/articles/-A-744952