The Influence of Liquidity, Capital Structure, Profitability and Cash Flows on the Company’s Financial Distress

Fahlevi, Muhammad Reza; Marlinah, Aan

doi:10.34208/jba.v20i1.409

Cited by 11 publications

(6 citation statements)

References 3 publications

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“…The operating cash flow ratio is an important indicator to determine whether a business can recover or not. Cash flow ratio, profitability and liquidity affect the financial distress of a company (Fahlevi & Marlinah, 2018). Operating cash flows, on the other hand, are based on subjective assumptions and do not contain expenses and income that are assessed on an accrual basis.…”

Section: Literature Reviewmentioning

confidence: 99%

Exploring the impact of cash flow, company size, and debt on financial performance in corporations

Hoti Arifaj,

Berisha,

Morina

et al. 2023

Investment Management and Financial Innovations

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This paper investigates the impact of operating cash flows, company size, and debt (including both cash and operating flows) on the financial performance of Kosovo’s ten most prominent publicly traded companies. Various analytical techniques were employed for hypothesis testing, including OLS linear regression analysis, correlation analysis between variables, and statistical tests such as the T-test and Ratio test. The financial performance analysis involves utilizing Return on Assets (ROA) as the dependent variable, while the independent variables encompass operating cash flows (CFO), firm size, and financial leverage.The study’s findings reveal noteworthy insights. Although cash flow (p &gt; 0.05) is not observed to have a significant impact, larger company size (p &lt; 0.01) is associated with diminished financial performance. Conversely, higher debt leverage (p &lt; 0.01) is linked to enhanced financial performance. Consequently, the results underscore the significant economic implications that firm size and financial leverage hold for the financial performance of corporations in Kosovo, as indicated by ROA.The observation that firms size plays a substantial role in financial performance aligns cohesively with established economic theory. As companies expand, they often encounter challenges related to efficient resource management.

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Section: Literature Reviewmentioning

confidence: 99%

Exploring the impact of cash flow, company size, and debt on financial performance in corporations

Hoti Arifaj,

Berisha,

Morina

et al. 2023

Investment Management and Financial Innovations

View full text Add to dashboard Cite

show abstract

“…Karakteristik perusahaan yang mengalami financial distress sendiri dapat terlihat dalam beberapa hal, yaitu melakukan penjualan terhadap aset operasional, melakukan merger, melakukan pengurangan pengeluaran, menerbitkan sekuritas baru, melakukan negosiasi dengan pihak ketiga, menukar utang dengan ekuitas, hingga mengajukan pailit atau kebangkrutan (Ross et al 2002). Selain itu, salah satu indikator teringan untuk mengidentifikasi bahwa suatu perusahaan mengalami financial distress sendiri adalah adanya ketidakmampuan perusahaan untuk memenuhi kewajiban jangka pendeknya (Fahlevi dan Marlinah 2018). Dengan demikian, perusahaan harus segera melakukan berbagai upaya dan tindakan yang berfokus untuk menjaga kelangsungan hidup perusahaan, terutama ketika ada sinyal bahwa perusahaan sedang menghadapi financial distress (Saputri dan Asrori 2019).…”

Section: Financial Distressunclassified

Pengaruh Rasio Keuangan, Komite Audit, dan Tata Kelola Perusahaan terhadap Financial Distress

Hanny,

Marlinah

2023

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The purpose of this study is to obtain empirical evidence about the influence of leverage, liquidity, profitability, sales growth, operating capacity, proportion of independent commissioners, size of audit committee, managerial ownership and frequency of audit committee meetings as independent variables on financial distress as dependent variable. The population in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2021. The study used purposive sampling with total 63 companies and 189 research data. This study uses multiple regression methods to examine variables that affect financial distress measured using the Altman Z-score. The results of this study indicate that Profitability, Operating Capacity, Proportion of Independent Commissioners, and Managerial Ownership have an influence on Financial Distress. While, Leverage, Liquidity, Sales growth, Size of Audit Committee, and Frequency of Audit Committee Meetings have no effect on Financial Distress.

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“…Metode pengambilan sampel yang digunakan dalam penelitian ini adalah purposive sampling method. Kriteria pemilihan sampel ditunjukkan pada tabel berikut: Operating Cash Flow memberikan penjelasan mengenai kinerja perusahaan dikarenakan tidak menggunakan basis akrual yang mengarah ke asumsi subjektif (Fahlevi and Marlinah, 2018). Berdasarkan penelitian yang dilakukan oleh Finishtya (2019), berikut adalah bentuk pengukuran operating cash flow:…”

Section: Metode Penelitianunclassified

Pengaruh Operating Cash Flow dan Faktor Pendukung Lainnya terhadap Financial Distress

Christy,

Natalylova

2023

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The purpose of this research is to obtain empirical evidence about the effect of operating cash flow, liquidity, profitability, financial leverage, firm size, managerial ownership, institutional ownership, proportion of independent commissioners, and free cash flow on financial distress. This research used a sample of manufacturing companies that are consistently listed on Indonesia Stock Exchange ranged from year 2019 to 2021 as the population. The sample was obtained by using purposive sampling method and obtained final sample of 65 manufacturing companies listed on Indonesia Stock Exchange so as to obtain a total of 195 research data and used the multiple regression statistic. The result in this research showed that profitability and firm size had an effect on financial distress. A low profitability is a signal of company incapacity to convert revenue flow into profit, and so an increase on profitability will lower the probability of financial distress. Firm size had an effect on financial distress means the greater the company's total assets, the bigger probability the company to experience financial distress because of the greater expenses. Besides, operating cash flow, liquidity, financial leverage, managerial ownership, institutional ownership, proportion of independent commissioners, and free cash flow had no effect on financial distress.

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The Influence of Liquidity, Capital Structure, Profitability and Cash Flows on the Company’s Financial Distress

Cited by 11 publications

References 3 publications

Exploring the impact of cash flow, company size, and debt on financial performance in corporations

Exploring the impact of cash flow, company size, and debt on financial performance in corporations

Pengaruh Rasio Keuangan, Komite Audit, dan Tata Kelola Perusahaan terhadap Financial Distress

Pengaruh Operating Cash Flow dan Faktor Pendukung Lainnya terhadap Financial Distress

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