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THE EFFECT OF LIQUIDITY RATIO LEVERAGE RATIO AND ACTIVITY RATIO IN PREDICTING FINANCIAL DISTRESS

ยท Pages: 581-592ยท (2021)ยท Published: June 6, 2019
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Abstract

Abstract :

Financial distress is the financial condition of companies that experience financial difficulties before the company goes bankrupt. This study aims to determine the effect of: (1) liquidity ratios in predicting financial distress; (2) leverage ratio in predicting financial distress; (3) activity ratio in predicting financial distress; (4) liquidity ratios, leverage ratios, and activity ratios in predicting financial distress. Data analysis method used a quantitative method approach. Analysis technique used is descriptive statistical, logistic regression, test coefficient of determination, and hypothesis testing. The results of the study show that partially the activity ratio has a significant and negative influence in predicting financial distress, while the liquidity ratio and leverage ratio do not have a significant influence in predicting financial distress. Simultaneously liquidity ratios, leverage ratios, and activity ratios have a significant influence in predicting financial distress

 

 

Author details
Agung Joni Saputra
Universal University Batam Indonesia
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