Articles

The Effects of Capital Intensity, Financial Distress, Leverage, Analyst Coverage and Investment Opportunity Set on Accounting Conservatism in Politically Connected Companies Listed on Indonesia Stock Exchange

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This study aims to examine the effect of capital intensity, financial distress, leverage, analyst coverage and investment opportunity set on accounting conservatism in politically connected companies listed on the Indonesia Stock Exchange. This research was conducted on 16 state-owned companies (BUMN) listed on the Indonesia Stock Exchange for the 2017-2021 period using a proposive sampling method. This research uses multiple regression method. The results of the study show that partially analyst coverage has a positive effect on accounting conservatism. Financial distress, leverage and investment opportunity sets have a negative effect on accounting conservatism. Capital intensity has no effect on accounting conservatism.

Financial Performance Analysis and Financial Distress Prediction of Indonesia State-Owned Enterprises in The Construction Industry Listed on IDX Before and During Economic Crisis in the Covid-19 Pandemic Era (Period 2019 – 2021)

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The Covid-19 pandemic has brought an immense impact on Indonesia’s economy. Indonesia officially went into recession after the Central Statistics Agency (BPS) announced negative GDP growth for two consecutive quarters, namely in the second quarter (-5.32%) and the third quarter (-3.49%) of 2020. Indonesia’s contracted economy has caused depression in many Indonesian sectors. The results of a survey by BPS in 2020 noted that the construction sector was recorded as one of the sectors that experienced the most decline in revenue, which was 87.94%. This study aims to measure the financial performance and health condition of Indonesian construction SOEs listed on IDX namely ADHI, PTPP, WSKT, and WIKA based on the decree of the Ministry of SOEs no. KEP-100/MBU/2002 as well as the financial distress prediction (bankruptcy potential) by using the Altman Z-Score method for the period 2019 to 2021. The result of the financial health rank level of each company from 2019 to 2021: ADHI (BBB, CCC, and B), PTPP (BBB, B, and BB), WSKT (BB, CC, and B), and WIKA (A, B, and B) respectively. According to the Altman Z-score result, all companies experienced declining in the total Altman Z-score results from 2019 to 2021 and were interpreted as being in a state of financial distress, except for WSKT. This study will complete previous research with a different approach and focus that can give a more equipped view regarding the impact of Covid-19 on the construction industry in Indonesia.

Prediction of Financial Distress on Properties and Real Estate in Indonesia

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Financial distress is a stage of decline in financial conditions which occurred before the onset of bankruptcy. This study was conducted with the aim of knowing the effect of Operating Capacity, Sales Growth, and Debt to Equity Ratio in predicting Financial Distress in property and real estate companies on Indonesian Stock Exchange in 2018-2020. The research method which is used is quantitative research. The sampling technique used purposive sampling method, namely the selection of samples with criteria that have been determined by the researcher. The data used is secondary data in the form of financial statements of property and real estate companies listed on the Indonesian Stock Exchange for the 2018-2020 period. The companies selected as the research sample were 38 companies so that the total observations were 114 observations. Financial distress is included as dummy variable, and it is categorized as 1 (one) for companies which experiencing financial distress and 0 (zero) for companies which is not experiencing in financial distress. The result of this study shows that operating capacity sales growth and debt to equity ratio do not affect the company’s probability of experiencing financial distress.

Determinants of Company Going Concern: Empirical Evidence in the Times of Covid-19 in Developing Capital Markets

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During the COVID-19 pandemic, various corporate sectors in Indonesia were affected by the pandemic, including manufacturing companies. Where during the pandemic many companies are threatened with their business continuity. This observation plan is to understand the influence of managerial ownership, financial distress and leverage on going concern companies with profitability as a moderating variable. In this study going concern was measured by determining the Scott R formula. The research methodology for testing and data analysis was using MRA (Moderating Regression Analysis). The population in this observation is the manufacturing industry listed on the Indonesia Stock Exchange (IDX) in 2020. The sample collection was carried out using the purposive sampling method with a total sample of 179 companies in 2020. The results of this observation prove that financial distress has a negative effect on going concern and leverage. Positive impact on going concern. Meanwhile, managerial ownership has no impact on going concern. Authorized profitability with return on assets is able to strengthen the influence of financial distress and leverage on going concern. Observational findings in this observation normative accounting theory elevate plans, skills and then determine how to meet the recognized goals. Normative accounting theory includes decisions about what to do to fulfill the desires that have been mentioned. The implication of this research is that the implementation of Pecking order theory explains that industries that get high profits will use relatively small liabilities because the industry will tend to set money in it. The normative theory here tries to explain the explanations that are usually conveyed to the users of the accounting explanations that will be presented.

Strategy Development for Survival & Growth of MRO Company during & Post Covid-19 Pandemic (Case Study: GMF Aeroasia)

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Indonesian Aviation Market 2020 was predicted to grow around 7.0% compared to 2019. It gave Indonesian MRO industry an optimism at first, at least in the beginning of the year, before WHO declared COVID-19 pandemic in March 2020. The COVID-19 pandemic has a dire impact on the aviation & MRO industry. As of July 2021, flights still haven’t reached 50% compared to pre-COVID era. Many MRO companies, including GMF AeroAsia, must face an unprecedented situation that caused the market to shrink significantly, and enter the financial distress zone. Several initiatives have been taken by the company. However, with the protracted pandemic conditions and the uncertainty of Indonesian Aviation Market recovery, further strategies are needed to survive and growth. This study aims to analyze the company and develop a strategy based on 2 stages, namely the retrenchment phase and the recovery phase. The retrenchment phase will focus on the survival strategy, while the recovery phase will focus on the growth strategy using scenario planning because the future is still uncertain. From the analysis and interviews, several initiatives and strategies for survival and growth were developed. Several initiatives for survival include headcount cuts, operational efficiency, product elimination, liquidation & divestment, equity for debt swaps, and renegotiate with lenders. While the growth strategy was developed based on 4 scenarios, namely Flying Through Thunderstorm, Flying with Engine Failure, Flying with Broken Wings, and Flying Zig-Zag.

The Effect of Liquidity, Leverage, and Profitability on Financial Distress with Audit Committee as a Moderating Variable

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This study examines the effect of liquidity, leverage, and profitability on financial distress with the audit committee as a moderating variable. This study used secondary data from the annual reports of manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2019. The research sample was selected using purposive sampling, and 33 companies were obtained as the study samples. The data were then analyzed using the logistic linear regression method with SPSS ver 26 software. The study results found that liquidity and profitability had a negative effect on financial distress, whereas leverage had a positive effect on financial distress. In addition, the study also found that the audit committee enhanced the effect of liquidity and profitability on financial distress. In contrast, the audit committee reduced the effect of leverage on financial distress.