Academia Open
Vol 8 No 1 (2023): June

Profitability, Liquidity, and Leverage: Exploring Financial Distress in the Mining Sector

Rosita Umamah (Universitas Muhammadiyah Sidoarjo)
Nurasik Nurasik (Universitas Muhammadiyah Sidoarjo)



Article Info

Publish Date
26 Jun 2023

Abstract

In the era of the Industrial Revolution 4.0, the competitive landscape among companies is intensifying, necessitating effective business strategies to avoid bankruptcy. This research examines the impact of profitability, liquidity, and leverage on financial distress in mining sector companies listed on the IDX from 2018 to 2020. Using a quantitative approach, the study analyzes data from a population of 41 mining sector companies. The findings reveal that profitability and liquidity, measured through ratios, do not significantly affect financial distress. However, leverage has a significant influence on financial distress. These results provide valuable insights for mining companies in formulating business strategies and managing financial risk to mitigate the potential for distress. The research contributes to the literature on financial distress in the context of the mining sector, addressing the challenges of increased competition and the need for sustainable company performance. Highlights: Determinants of financial distress: Investigating the impact of profitability, liquidity, and leverage on the occurrence of financial distress in mining sector companies. Empirical analysis: Analyzing the relationship between these variables and financial distress using quantitative research methods and ratios. Implications for mining sector companies: Providing insights for companies in the mining sector to better manage their profitability, liquidity, and leverage in order to mitigate the risk of financial distress and maintain sustainable performance. Keywords: profitability, liquidity, leverage, financial distress, mining sector

Copyrights © 2023






Journal Info

Abbrev

acopen

Publisher

Subject

Agriculture, Biological Sciences & Forestry Arts Humanities Chemistry Computer Science & IT Earth & Planetary Sciences Economics, Econometrics & Finance Environmental Science Languange, Linguistic, Communication & Media Law, Crime, Criminology & Criminal Justice Library & Information Science Medicine & Pharmacology Physics Social Sciences Other

Description

Academia Open is published by Universitas Muhammadiyah Sidoarjo published 2 (two) issues per year (June and December). This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge. This ...