THE EFFECT OF MARKET VALUE RATIO AND ACTIVITY RATIO ON FINANCIAL DISTRESS IN TECHNOLOGY SECTOR COMPANIES LISTED ON THE IDX 2021 - 2023

• Main Author: Nindy Nofita, Cintya
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/79966
• Institution: Institut Teknologi Bandung

Technological developments in Indonesia have encouraged the growth of the technology sector. However, the tech winter phenomenon in 2022 make a decline in investor interest which causes a decrease in stock performance. This has an impact on potential financial distress for technology sector companies. Symptoms of financial distress generally begin to appear long before bankruptcy occurs. Therefore, it is important for stakeholders to carry out financial distress prediction analysis as early as possible. This condition certainly deserves attention to prevent more severe negative impacts in the future. The aim of this research is to examine the influence of Earning Per Share (EPS), Price Book Value (PBV), Total Asset Turnover (TATO), and Fixed Asset Turnover (FATO) on predicting financial distress using the Altman Z-Score model in sector companies technology listed on the Indonesia Stock Exchange (IDX) for the period 2021 Q1 to 2023 Q2. This research uses 13 samples of technology sector companies listed on the IDX. Panel data regression analysis was chosen in this study because it is able to observe the behavior of research variables both in cross section which reflects comparisons between companies and in time series which depicts the development of research variables for each company from time to time during the observation period. The results of this study show that TATO is partially significant and has a positive effect on financial distress use altman z-score therefore lower financial distress risk. EPS, PBV, FATO are partially have not significant effect on financial distress. For EPS, PBV, TATO, FATO simultaneously have a significant effect on financial distress in technology sector companies. The results of this research indicate that to maintain financial stability and avoid potential financial distress technology companies need to maintain the positive growth trend of TATO. Management's ability to decrease assets with optimize asset utilization and increase sales to generate net profit is an important key to the performance of technology companies in navigating tech winter conditions.