The Effect of Fundamental Variables and Macro Variables on the Probability of Companies to Suffer Financial Distress A Study on Textile Companies Registered in BEI

Abstract

The objectives of this research are to know and to explain the effects of fundamental variables and macro variables on financial distress probability and understand variable contribution sequence. Based on eight variables used, the fundamental variables are Working Capital To Total Asset (WC/TA), Sales To Total Assets (S/TA), Return On Equity (ROA), Debt Ratio (DR), Shareholder Equity To Total Asset (SETA), while macro variables are Exchange Rate Sensitivity, Inflation Sensitivity and Interest Sensitivity. The population is 15 go public textile companies listed in Bursa Efek Indonesia (BEI) and did not have delisting during research period. The sampling technique used is census sampling technique. The data source is financial statement published by BEI in 2010-2012. The analysis model used is logistic regression and sensitivity analysis. The research type is explanatory research. Research finding shows that Working Capital To Total Asset (WC/TA), Total Debt To Total Asset (DR), Shareholder Equity To Total asset (SETA), and Inflation Sensitivity give significant effect on financial distress of companies and the highest effect is given by Debt Ratio (DR) and Inflation Sensitivity.

Keywords : Financial distress, Logistic Analysis Regression, Sensitivity Analysis