How to Predict Financial Distress in the Wholesale Sector: Lesson from Indonesian Stock Exchange
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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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Published: 14 July 2019

How to Predict Financial Distress in the Wholesale Sector: Lesson from Indonesian Stock Exchange

Zainul Kisman, Dian Krisandi

Universitas Trilogi, Indonesia

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.02.03.109

Pages: 569-585

Keywords: Financial Distress, Discriminant Analysis

Abstract

Financial distress is a stage of decline in financial conditions experienced by a company before going bankrupt. This phenomenon in Indonesia in recent years since 2016 shows more and more companies are experiencing bankruptcy. The purpose of this study is to know what are the factors causing it using discriminant analysis. The population of this study is issuers in sub-sector wholesale listed on the Indonesia Stock Exchange 2010-2015 period. Results showed that all four variables those are leverage, activity, liquidity, and profitability have significance values and able to explain 72.42% of the variation distress and non-distress. The accuracy of the model is 96.8% on distinguishing companies that experience financial-distress with non-distress. Overall this research model is reliable and valid to be used for forecasting companies that will experience bankruptcy.

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