Financial Distress Analysis in the Consumer Goods Industry Post Covid-19 Pandemic

Linda Grace Loupatty; Rita  J.D. Atarwaman; Alfrin  E. M. Usmany

Authors

Linda Grace Loupatty Faculty of Economics and Business, Universitas Pattimura; Ambon, Indonesia
Rita J.D. Atarwaman Faculty of Economics and Business, Universitas Pattimura; Ambon, Indonesia
Alfrin E. M. Usmany Faculty of Economics and Business, Universitas Pattimura; Ambon, Indonesia

Keywords:

financial distress, Altman z-score, Net Working Capital, Total Assets

Abstract

This study aims to empirically test whether Net Working Capital to Total Assets, Retained Earnings to Total Assets, EBIT to Total Assets, and Book Value of Equity to Book Value of Total Debt have an effect on Financial Distress in companies in the Consumer Goods Industry sector listed on the Indonesia Stock Exchange after the Covid-19 pandemic using the Altman Z-Score method. The sample used consisted of 52 companies obtained through a saturated sampling technique (Census Technique). The data analysis method employed was the Modified Altman Z-Score III Model and Logistic Regression Test. The independent variables (X) in this study are net working capital to total assets, retained earnings to total assets, EBIT to total assets, and book value of equity to book value of total debt, while the dependent variable (Y) is financial distress. The data used in this study are secondary data, namely annual reports. The results of the study show that, partially, Net Working Capital to Total Assets, Retained Earnings to Total Assets, EBIT to Total Assets, and Book Value of Equity to Book Value of Total Debt do not have a significant effect on the occurrence of financial distress.

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