THE EFFECT OF FINANCIAL PERFORMANCE ON FINANCIAL DISTRESS CONDITION USING THE GROVER MODEL IN TRANSPORTATION INFRASTRUCTURE SERVICE PROVIDERS IN INDONESIA
In the National Medium-Term Development Plan (RPJMN) 2020-2024, it is stated that the infrastructure expenditure needs are estimated to reach Rp6,421 trillion or an average of 6.08% of the Gross Domestic Product (GDP) (Preliminary Calculation), resulting in the Infrastructure Capital Stock reachi...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/73779 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | In the National Medium-Term Development Plan (RPJMN) 2020-2024, it is stated
that the infrastructure expenditure needs are estimated to reach Rp6,421 trillion or
an average of 6.08% of the Gross Domestic Product (GDP) (Preliminary
Calculation), resulting in the Infrastructure Capital Stock reaching 50 percent of
GDP in 2014. However, in meeting these needs, there is still a significant financing
gap in terms of infrastructure funding or, in other words, the current government
budget availability is limited to finance infrastructure development. The current
trend in infrastructure development has seen many innovative funding schemes.
One of the indicators used to assess the health of a company and attract investors
to invest in the infrastructure sector is financial distress.
This research is a quantitative study aimed at determining the influence of liquidity
ratios, leverage, and profitability on financial distress conditions. The sample used
is the financial statements of transportation infrastructure companies in Indonesia
for the period of 2016-2020. The dependent variable used is financial distress using
the Grover model, while the independent variables used are liquidity ratio
measured by the current ratio (CR), leverage ratio measured by the debt to total
asset ratio (DAR), and profitability ratio measured by the return on asset ratio
(ROA). The sample determination method used is purposive sampling, with a final
sample size of 8 transportation infrastructure service providers in Indonesia.
The results of the study show that CR and DAR have a positive but not significant
effect on the financial distress condition, while ROA has a significant negative effect
on financial distress.
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