Indonesian Journal of Business, Accounting and Management
Vol 1 No 01 (2018): [IJBAM] Indonesian Journal of Business, Accounting and Management Vol. 01 No. 01

Influence of The Ratio of Profit Margin, Financial Leverage Ratio, Current Ratio, Quick Ratio Against The Conditions and Financial Distress

Andi Purnomo (Sekolah Tinggi Ilmu Ekonomi Indonesia)



Article Info

Publish Date
04 Jul 2018

Abstract

Financial distress is occurred before bankruptcy. This condition could be predicted by analyzing Financial Statement. This study aims to determine whether there is significant influence between profit margin ratio, financial leverage ratio, current ratio, and quick ratio on Financial distress to determine how much their influeance on Financial distress in a Company. Based on result of data processing using SPSS 17.0 version, the author obtained value of multiple correlation coeffiicient in 2008 is 0.933 (R), it means X1 (profit margin ratio), X2 (financial leverage ratio), X3 (current ratio) and X4 (quick ratio) jointly have strong and positive relationship in predicting Financial distress, And for value of multiple correlation coefficient in 2009, obtained 0.582 (R), it means X1 (profit margin ratio), X2 (financial leverage ratio), X3 (current ratio) and X4 (quick ratio) jointly have strong and positive relationship in predicting Financial distress. Based on F-test calculation in 2008, multiple linear regression is obtained that Fhitung > Ftable. Value of Fhitung is 40,962, whereas value of Ftable is 2,922, it means that Ha is rejected and Ho is accepted. This means regression model can be used to predict financial distress condition or it can be said that X1 (profit margin ratio), X2 (financial leverage ratio), X3 (current ratio) and X4 (quick ratio) jointly influence significanly on Company’s Financial Statement condition (Y). whereas for F-test calculation in 2009, multiple linear regression is obtained that Fhitung > Ftable , value of Fhitung is 13,839 and value of Ftable is 2,922. it means that Ha is rejected and Ho is accepted. This means regression model can be used to predict financial distress condition or it can be said that X1 (profit margin ratio), X2 (financial leverage ratio), X3 (current ratio) and X4 (quick ratio) jointly influence significantly on Company’s Financial Statement condition (Y).

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Journal Info

Abbrev

ijbam

Publisher

Subject

Economics, Econometrics & Finance

Description

Indonesian Journal of Business, Accounting, and Management (IJBAM) are devoted to publishing research papers for students, academics, researchers, and professors to share advances in accounting, business, and management theory and practice. IJBAM aimed to tie researchers to share high-quality ...