THE EFFECT OF RETURN ON ASSET (ROA) AND COMPANY SIZE ON FINANCIAL DISTRESS
Keywords:
Financial Distress, Return On Assets (ROA), Company Size
Abstract
Introduction/Main Objectives: When setting up a company, of course the aim is to make a profit, but it will also experience a decline in financial conditions. So many companies experience bankruptcy because these companies are less effective and efficient in managing financial reports. This research aims to determine and analyze the influence of return on assets (ROA) and company size on financial distress. Background Problems : The company's inability to anticipate global developments by strengthening management fundamentals will result in company bankruptcy. One sign for a company that has the potential to experience bankruptcy is financial distress (Kristiana, 2018). Novelty: Research Methods: The method used in this research is descriptive analysis and verification analysis using secondary data. The population in this research is Manufacturing Companies in the Consumer Goods Industry Sector listed on the Indonesia Stock Exchange (BEI) 2017-2021. Meanwhile, the sample in this research was determined using a purposive sampling technique to obtain research sample data of 160 companies listed on the Indonesia Stock Exchange for 2017-2021. The analytical method used in this research is multiple linear regression analysis which is used with the help of SPSS 26 software . Findings/Results : In research and data analysis conducted on manufacturing companies in the consumer goods industry listed on the Indonesia Stock Exchange from 2017 to 2021, it was found that the company's net asset value (ROA) had a negative and significant effect on the level of financial difficulty. In other words, when ROA is higher, the level of financial distress is lower, and conversely, when ROA is lower, the level of financial distress is lower. Conclusion: Based on the research that has been carried out, the results obtained are: return on assets (ROA) and company size influence financial distress. .References
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Fajriana and Priantianah, 2016. The Influence of Corporate Social Responsibility and Capital Structure on Company Value.
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I Gede Pande and I Gede Agus. 2020. The Influence of Company Size, Liquidity, Profitability and Leverage on Dividend Policy . JIMAT (Scientific Journal of Accounting Students), Vol. 11 No. 2.
Imam Ghozali. 2018. Application of Multivariate Analysis Using the IBM SPSS 26 Program. Semarang Diponegoro University Publishing Agency.
Imam Susanto and Indah Setyowat., 2021. The Influence of Net Profit Margin and Return on Assets on the Financial Distress of Coal Mining Sector Companies Registered on BEI for the 2014-2018 Period . Journal of Vocational Taxation (JUPASI) Vol. 2, no. 2.
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Niko Ramadhani, 2010. Financial Distress definition and examples https://www.akseleran.co.id/blog/financial-distress-ilah/ accessed April 4 2022.
Prihadi, T. 2010. Financial Report Analysis : Theory and Application. Central Jakarta, PPM.
Priharto Sug. 2020. The Influence of Intellectual Capital and Company Size on Financial Distress.
R Setiawan. 2020. The Influence of Debt Ratio, Current Ratio and Return on Assets on Financial Distress in Manufacturing Companies in the Basic Industry and Chemical Sectors listed on the Indonesia Stock Exchange 2013-2018. Journal of Accounting and Finance Vol 17. No 2.
Ridwan Ramdani. 2016. The Effect of Return on Assets (ROA) on Financial Distress. General Achmad Yani University Postgraduate Program, Cimahi.
Siahaan, Hinsa. 2004. Capital Structure Optimization Theory and Its Application in Maximizing Company Value. Journal of Finance and Monetary. Volume 7 No. 1
Subramanyam, KR. 2017. Financial Report Analysis Book 2, Ed 11. South Jakarta: Salemba Empat.
Sudirno and Suparto, 2019. Economic and Business Research Methods. Majalengka University Publishing Agency.
Sugiyono. 2017. Quantitative, Qualitative and R&D Research Methods. Bandung: Alfabeta, CV.
Sujarweni, V. Wiratna. 2017. Financial Report Analysis : Theory, Application and Research Results. Yogyakarta: Pustaka Baru Press.
Suwito, Edy., Herawaty, Arleen. 2005. Analysis of the Influence of Company Characteristics on Income Smoothing Actions Taken by Companies Listed on the Jakarta Stock Exchange. National Accounting Symposium VIII. Solo.
Syaiful Bahri. 2016. Introduction to Accounting. Yogyakarta.
Titik Farida. 2019. Financial Distress Theory and Developments in the Indonesian Context. Edition 1. Malang. Media Intelligence.
Yeni Yustika. 2015. The Influence of Liquidity, Leverage, Profitability, Operating, Capacity and Managerial Agency Costs on Financial Distress (Empirical Study of Manufacturing Companies Listed on the Indonesian Stock Exchange 2011-2013). Jom FEKON Vol. 2 No. 2
Cahyono , DD ., Andini, R., & Raharjo, K. 2016. The influence of the audit committee, institutional ownership, board of commissioners, company size (size), leverage (der) and profitability (roa) on tax avoidance in banking companies listed in the period 2011 – 2013. Pandanaran University Accounting Undergraduate Student Scientific Journal Vol 2, No 2
Cindawati, 2017. Company: Definition, Objectives, Elements, Types and Examples. https://www.bernas.id/06/11183/80324-usaha-pengertian-besar-besar-besar-dan-cepatnya . Accessed March 16, 2022.
Cristiana, R., & Nyman, S. 2022. The Influence of Firm Size, Return on Equity, and Current Ratio on Tax Avoidance in LQ 45 Companies Listed on the Indonesian Stock Exchange. Accounting, 14, 172–186
Deanisah Suryani Putri. 2020. The Influence of Financial Ratios, Company Size and Agency Fees on Financial Distress (Empirical Study of Retail Companies Listed on the IDX in 2016-2018). Journal of Accounting Exploration Vol. 2 No. 1 Series A.
Dendawijaya, Lukman. 2003. Banking Management. Jakarta: Ghalia Indonesia
Edison Sutan Kayo, 2021. Consumer Goods Industry Sector (5) – Manufacturing . https://www.sahamok.net/emiten/sector-industri-barang-konsumsi . Accessed April 27, 2022.
Fahmiwati and Luhgiatn. 2017. Analysis of the Effect of Financial Ratios on Financial Distress (Case Study of Retail Trading Sector Companies on the Indonesian Stock Exchange for the 2012-2015 Period). Journal of Accounting & Business (JAB), Vol. 3, no. 01.
Fajriana and Priantianah, 2016. The Influence of Corporate Social Responsibility and Capital Structure on Company Value.
Glousa Lera Silanno. 2021. The Influence of Current Ratio, Debt To Equity Ratio and Return On Assets on Financial Distress in Companies in the Consumer Goods Industry Sector (Empirical Study on the Indonesian Stock Exchange). Journal of Economics, Social & Humanities Vol.2 No.07.
I Gede Pande and I Gede Agus. 2020. The Influence of Company Size, Liquidity, Profitability and Leverage on Dividend Policy . JIMAT (Scientific Journal of Accounting Students), Vol. 11 No. 2.
Imam Ghozali. 2018. Application of Multivariate Analysis Using the IBM SPSS 26 Program. Semarang Diponegoro University Publishing Agency.
Imam Susanto and Indah Setyowat., 2021. The Influence of Net Profit Margin and Return on Assets on the Financial Distress of Coal Mining Sector Companies Registered on BEI for the 2014-2018 Period . Journal of Vocational Taxation (JUPASI) Vol. 2, no. 2.
Jaka Maulana. 2022. The Effect of Return on Assets (ROA) and Company Size on Financial Distress in Chemical Sub-Sector Companies Listed on the Indonesian Stock Exchange. Land Journal Volume 3, Number 1 e- ISSN: 2716-263X.
Jessica Lienanda and Agustin Ekadjaja. 2019. Factors that influence financial distress in manufacturing companies listed on the IDX. Journal of Multiparadigm Accounting, Volume 1 No. 4.
Jusu, H. 2011. Basics of Accounting Volume 2 Ed. 7.
Kariyato. 2017. Financial Report Analysis. First Printing. UB Press. Poor.
Kasmir. 2016. Financial Report Analysis . Jakarta: Raja Grafindo Persada.
Marisa Lutfia Firdiana. 2016. The Influence of Current Ratio, Return on Assets, Company Size and Sales Growth on Financial Distress.
Monica Wareza (CNBC Indonesia). 2021. HM Sampoerna's Net Profit in Semester I Drops 15% to IDR 4 T. https://www.cnbcindonesia.com/market/20210730101516-17-264811/duh-laba- Bersih -hm-sampoerna-semester-i-drop-15-jadi-rp- 4-t . Accessed March 25, 2022.
Mulyadi. 2014. Cost Accounting. Edition-5. Yogyakarta: Gajah Mada University.
Munawir HS. 2012. Financial Report Analysis (Fourth Edition), 16th Printing. Liberty Yogyakarta
Ni Wayan Agustin., 2019. The Influence of Financial Ratios on Financial Distress of Retail Companies Listed on the Indonesia Stock Exchange (BEI). E- Accounting Journal, Vol. 26 No. 1.
Niko Ramadhani, 2010. Financial Distress definition and examples https://www.akseleran.co.id/blog/financial-distress-ilah/ accessed April 4 2022.
Prihadi, T. 2010. Financial Report Analysis : Theory and Application. Central Jakarta, PPM.
Priharto Sug. 2020. The Influence of Intellectual Capital and Company Size on Financial Distress.
R Setiawan. 2020. The Influence of Debt Ratio, Current Ratio and Return on Assets on Financial Distress in Manufacturing Companies in the Basic Industry and Chemical Sectors listed on the Indonesia Stock Exchange 2013-2018. Journal of Accounting and Finance Vol 17. No 2.
Ridwan Ramdani. 2016. The Effect of Return on Assets (ROA) on Financial Distress. General Achmad Yani University Postgraduate Program, Cimahi.
Siahaan, Hinsa. 2004. Capital Structure Optimization Theory and Its Application in Maximizing Company Value. Journal of Finance and Monetary. Volume 7 No. 1
Subramanyam, KR. 2017. Financial Report Analysis Book 2, Ed 11. South Jakarta: Salemba Empat.
Sudirno and Suparto, 2019. Economic and Business Research Methods. Majalengka University Publishing Agency.
Sugiyono. 2017. Quantitative, Qualitative and R&D Research Methods. Bandung: Alfabeta, CV.
Sujarweni, V. Wiratna. 2017. Financial Report Analysis : Theory, Application and Research Results. Yogyakarta: Pustaka Baru Press.
Suwito, Edy., Herawaty, Arleen. 2005. Analysis of the Influence of Company Characteristics on Income Smoothing Actions Taken by Companies Listed on the Jakarta Stock Exchange. National Accounting Symposium VIII. Solo.
Syaiful Bahri. 2016. Introduction to Accounting. Yogyakarta.
Titik Farida. 2019. Financial Distress Theory and Developments in the Indonesian Context. Edition 1. Malang. Media Intelligence.
Yeni Yustika. 2015. The Influence of Liquidity, Leverage, Profitability, Operating, Capacity and Managerial Agency Costs on Financial Distress (Empirical Study of Manufacturing Companies Listed on the Indonesian Stock Exchange 2011-2013). Jom FEKON Vol. 2 No. 2
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