THE EFFECT OF FINANCIAL RATIOS ON FINANCIAL DISTRESS IN THE PROPERTY, REAL ESTATE AND BUILDING CONSTRUCTION SECTOR AT THE IDX IN 2019-2023

Novie Astuti Setianingsih, Wiwiek Kusumaning Asmoro, Atik Tri Andari, Fitria Nur Hamidah, Arvieka Sabilla Putri Setiadi

Abstract


The study explores the determinants of financial distress, defined as a company’s incapacity to meet its obligations and considered an early warning of bankruptcy. It specifically analyzes the impact of profitability (ROA), liquidity, leverage, activity, and sales growth ratios on financial distress. The goal is to provide companies, investors, and creditors with a basis for considering these ratios as critical information when assessing a company's susceptibility to financial distress. As a quantitative study, the research sample includes 10 companies from the Property, Real Estate, and Construction Sectors that were part of the LQ45 index on the BEI between 2019 and 2023, selected through the purposive sampling method. The results of the hypothesis testing are as follows: H1, postulating a negative effect of profitability on financial distress, is rejected. H2, postulating a negative effect of liquidity on financial distress, is rejected. H3, which stated that leverage has a positive effect on financial distress, is rejected. Conversely, H4, positing a negative effect of sales growth on financial distress, is accepted. Furthermore, H5, which stated that company size has a negative effect on financial distress, is accepted.

Full Text:

PDF

References


Akbar, T., & Pratiwi, E. U. (2024). A Pre- and Post-Pandemic Analysis of Sales Growth, Leverage, and Intellectual Capital as Determinants of Financial Distress in Property & Real Estate. Review of Accounting and Taxation, 3(2). https://doi.org/10.61659/reaction.v3i2.189

Almeida, R. P. (2024). Cycles, Trends, Disruptions: The Real Estate Centrality on the Global Financial Crisis, the COVID-19 Pandemic, and the New Techno-Economic Paradigm. https://doi.org/10.20944/preprints202411.1199.v1

Arief, H., Saratian, E. T. P., Oktaviar, C., Marlapa, E., & Soelton, M. (2024). The Influence of Sales Growth, Profitability, Liquidity and Firm Size Towards Financial Distress. Formosa Journal of Sustainable Research, 3(8), 1923–1934. https://doi.org/10.55927/fjsr.v3i8.10636

Arsana, I. N., Suardana, I. M., & Ariffianti, I. (2024). Liquidity Risk, Credit Risk and Capital as Determining of Predicting Financial Distress in Rural Banks in Indonesia. Asian Journal of Engineering, Social and Health, 3(8), 1703–1717. https://doi.org/10.46799/ajesh.v3i8.384

Awwaliyah, I. N., Widodo, R., Singgih, M., Susanto, A. B., & Prajitiasari, E. D. (2024). Financial Metrics for Distress Prediction in Indonesia’s Property and Real Estate Sector. Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024), 189–202. https://doi.org/10.2991/978-94-6463-585-0_14

Becik, T. F., Hasanah, N., & Muliasari, I. (2023). The Effect Of Board Size, Profitability And Capital Intensity On Tax Aggressiveness In Property And Real Estate Sector Companies Listed On The Indonesian Stock Exchange In 2017 - 2019. Marginal : Journal of Management, Accounting, General Finance and International Economic Issues, 2(4), 966–977. https://doi.org/10.55047/marginal.v2i4.784

Christian, Y. A., & Kustanti, E. R. (2022). Hubungan Antara Dukungan Sosial Orangtua Dan Pengambilan Keputusan Karir Pada Siswa Kelas XI Sma Pangudi Luhur Van Lith. Jurnal EMPATI, 11(6), 394–401. https://doi.org/10.14710/empati.0.36829

Christine, D., Wijaya, J., Chandra, K., Pratiwi, M., Lubis, M. S., & Nasution, I. A. (2019). Pengaruh Profitabilitas, Leverage, Total Arus Kas dan Ukuran Perusahaan terhadap Financial Distress pada Perusahaan Property dan Real Estate yang Terdapat di Bursa Efek Indonesia Tahun 2014-2017. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 2(2), 340–350. https://doi.org/10.36778/jesya.v2i2.102

Farooq, U., Qamar, M. A. J., & Reddy, K. (2020). Impact Size and Determinants of Indirect Cost of Financial Distress: Role of Receivable and Inventory Management. Asian Academy of Management Journal of Accounting and Finance, 16(2), 179–207. https://doi.org/10.21315/aamjaf2020.16.2.8

Febinda, Ruma, Z., Anwar, Amin, A. M., & Ramli, A. (2023). Analysis Of Financial Distress In Broadcasting Sub-Sector Companies Listed On The Indonesia Stock Exchange. MARGINAL JOURNAL OF MANAGEMENT, ACCOUNTING, GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES, 2(3). https://doi.org/10.55047/marginal.v2i3.661

Iqbal, M., Afwa, A., & Moniko, M. (2025). The Impact Of Fear Of Missing Out On Obsessive-Compulsive Buying Behavior: Exploring The Role Of Brand Passion (Among Generation Z In Pekanbaru City). E-Jurnal Apresiasi Ekonomi, 13(3). https://doi.org/10.31846/jae.v13i3.990

Jati, A. W., Kholmi, M., & Jannah, W. (2023). The Role of Intellectual Capital in the Relationship between Good Corporate Governance, Financial Performance and Financial Distress. Riset Akuntansi Dan Keuangan Indonesia, 8(2), 122–131. https://doi.org/10.23917/reaksi.v8i2.2364

Kosiah, K., Nurjanah, R., & Artis, D. (2018). Analisis pengaruh investasi dan kesempatan kerja terhadap produk domestik bruto Indonesia. E-Journal Perdagangan Industri Dan Moneter, 6(3), 145–156. https://doi.org/10.22437/pim.v6i3.7312

Lestari, L., & Erdiana, A. (2024). Pengaruh Earning Per Share Net Profit Margin dan Tobin’s Q Terhadap Return Saham Syariah Sektor Kesehatan di Bursa Efek Indonesia. Jurnal Ilmiah Ekonomi Islam, 10(1), 969. https://doi.org/10.29040/jiei.v10i1.12772

Masruroh, I., Sanusi, F., & Purbasari, I. (2025). The Influence of Liquidity and Leverage on Financial Distress With Profitability as Moderating Variables in Property and Real Estate Companies Listed on The IDX Period 2019-2023. Journal of Governance, Taxation and Auditing, 4(1), 31–46. https://doi.org/10.38142/jogta.v4i1.1462

Oktaviano, B., Wulandari, D. S., & Rasidi, A. B. (2024). Does Firm Size Buffer Tax Aggressiveness? Examining Financial Distress and Capital Intensity. International Journal of Scientific Multidisciplinary Research, 2(10), 1591–1608. https://doi.org/10.55927/ijsmr.v2i10.12082

Rahmat, R. A. H., Ramdhany, M. A., Hendayana, Y., & Novatiani, A. (2023). Unraveling transfer pricing in construction sectors: Tax optimization, compliance, and environmental risk. Atestasi : Jurnal Ilmiah Akuntansi, 6(2), 895–904. https://doi.org/10.57178/atestasi.v6i2.776

Sitanggang, T. N., Cindy, C., Hansen, H., Jesslyn, J., & Cynthia, C. (2021). Factors Affecting Financial Distress in Manufacturing Companies in the Food and Beverage Sub-Sector Listed on the Indonesia Stock Exchange in 2016–2020. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(2), 3213–3219. https://doi.org/10.33258/birci.v4i2.2057

Sukirno. (2022). Financial Distress: Implications of Cash Ratio, Total Debt To Equity Ratio, And Return On Asset. Jurnal Keuangan Dan Perbankan (KEBAN), 2(1), 48–59. https://doi.org/10.30656/jkk.v2i1.5860

Syafella, D. N., Simbolon, R., & Rangkuti, L. E. (2022). Pengaruh Laba, Capital Intensity, Leverage, dan Aktivitas Terhadap Financial Distress Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia. JRAM (Jurnal Riset Akuntansi Multiparadigma), 9(1), 23–29. https://doi.org/10.30743/akutansi.v9i1.5430

Thaha, S., Diputra, I., Hariyanti, H., & Machmud, M. (2023). Determining Factors of Financial Distress in Property and Real Estate Companies Listed on the Indonesia Stock Exchange. Jurnal Ilmu Manajemen Profitability, 7(2), 205–214.

Yunia, Y., Teti Chandrayanti, & Rizka Hadya. (2024). Analisis Perbandingan Kinerja Keuangan Sebelum dan Saat Pandemi Covid-19 pada Perusahaan Maskapai Penerbangan yang Terdaftar di BEI. Ekasakti Matua Jurnal Manajemen, 2(2), 151–161. https://doi.org/10.31933/emjm.v2i2.1057

Zhang, J., Wang, J., & Zhu, A. (2012). The relationship between real estate investment and economic growth in China: a threshold effect. The Annals of Regional Science, 48(1), 123–134. https://doi.org/10.1007/s00168-010-0388-2

Zhao, H., & Ai, T. (2020). Determinants of the Development of Green Buildings in China’s Provinces: An Empirical Analysis. Proceedings of the 4th International Conference on Culture, Education and Economic Development of Modern Society (ICCESE 2020). https://doi.org/10.2991/assehr.k.200316.326




DOI: https://doi.org/10.31846/jae.v14i1.1010

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

e-Jurnal Apresiasi Ekonnomi Indexed by: