Aug 2026· Development Through Research and Innovation IDSC-2026· pp. 473-481· 0 citations· 6 references
Abstract
This study examines the relationship between financial performance and corporate risk among companies listed on the regulated market of the Bucharest Stock Exchange (BVB) between 2019 and 2024. The main objective is to evaluate the influence of bankruptcy risk indicators (Altman Z-score and Conan and Holder model), liquidity ratios (current ratio and quick ratio), financial leverage, and stock returns on financial performance, as measured by return on assets (ROA) and return on equity (ROE). The methodological framework incorporates distribution analysis and correlation analysis using Pearson, Spearman and Kendall coefficients, as well as linear regression models to evaluate the explanatory power of risk and liquidity indicators on financial performance. The results suggest that ROA is more closely linked to fundamental financial conditions than ROE, as it exhibits stronger and more consistent relationships with financial stability and liquidity indicators. In contrast, ROE appears less predictable, reflecting the influence of firm-specific financial policies. Regression analysis reveals moderate explanatory power, with significant relationships emerging only during specific periods, particularly in the post-pandemic context. Furthermore, stock returns demonstrate weak and unstable connections with accounting performance, emphasising the impact of market inefficiencies. Overall, the findings emphasise the dynamic and context-dependent nature of the relationship between performance and risk in an emerging market environment.
This study aims to examine the effects of financial ratios and corporate governance on the probability of financial distress among manufacturing companies listed on the Indonesia Stock Exchange during the 2020–2025 period. Financial ratios are represented by profitability, liquidity, leverage, and activity ratios, while corporate governance is proxied by the proportion of independent commissioners. This study employed a quantitative research approach using secondary data obtained from the annual financial statements of manufacturing companies listed on the Indonesia Stock Exchange. The sample consisted of 900 firm-year observations selected through purposive sampling. Data were analyzed using binary logistic regression to estimate the probability of financial distress. Prior to hypothesis testing, the model was evaluated through multicollinearity testing, overall model fit, Hosmer–Lemeshow goodness-of-fit test, classification accuracy, receiver operating characteristic (ROC) analysis, and the Nagelkerke R-square coefficient. The results reveal that profitability, measured by Return on Assets (ROA), and activity ratio, measured by Total Asset Turnover (TATO), have a significant negative effect on the probability of financial distress, indicating that firms with higher profitability and more efficient asset utilization are less likely to experience financial distress. Conversely, leverage, measured by the Debt-to-Equity Ratio (DER), has a significant positive effect, suggesting that greater reliance on debt financing increases the likelihood of financial distress. In contrast, liquidity, measured by the Current Ratio (CR), and corporate governance, proxied by the proportion of independent commissioners, do not have a statistically significant effect on financial distress. The findings highlight that profitability, leverage, and asset utilization are key determinants of financial distress, whereas short-term liquidity and board independence are insufficient to explain financial distress among Indonesian manufacturing firms. These findings provide valuable insights for corporate managers, investors, creditors, and policymakers in identifying early warning indicators of financial distress and strengthening corporate financial sustainability.
Alifia Nur Afiifah· International Journal of Cur...· 0 citations
The profitability of a country’s banking sector is a critical indicator of its overall economic health. This study examines the impact of financial risk on the performance of the banking sector in India, with a specific focus on identifying the moderating factors that influence this relationship. Using data from 26 Indian banks listed on the stock exchange from 2012 to 2023, the research employs fixed effects regression to investigate the relationship between financial risk and performance. Return on assets (ROA) and return on equity (ROE) were used as the key indicators of financial performance. The independent variables include credit risk (CR), capital adequacy ratio (CAR), liquidity risk (LR), loan-to-deposit ratio (LDR), interest rate risk (IRR), and market risk (MR). The results indicate a significant effect of financial risk on the financial performance of banks, with varying levels of significance at different risk levels. Furthermore, moderated regression analysis was applied to examine the effect of various macroeconomic and bank-specific moderating factors on the association between financial performance and financial risk. The findings provide valuable insights into the risk-performance dynamics within the Indian banking sector.
Harsha Motyani, R. Kothari· International Journal of Ban...· 0 citations
This research examines the effect of liquidity, leverage, activity, and profitability on financial distress among manufacturing companies included in the LQ45 Index in Indonesia during 2020–2024. This research used a quantitative explanatory approach to investigate the relationship between the variables. The analysis relied on secondary data obtained from the audited annual reports of 7 manufacturing companies selected by purposive sampling method, resulting in a balanced panel dataset consisting of 35 observations. Financial distress was measured using the Altman Z-Score, while TATO, ROA, DER, and CR were employed as the independent variables. To evaluate both the individual and combined effects of these variables on financial distress, panel data regression analysis was conducted using the CEM, supported by t-test and F-test analysis. The results reveal that liquidity (t = 2.426; p = 0.022) and profitability (p = 0.070) have positive and statistically significant correlations with the Altman Z-Score, indicating that stronger liquidity and higher profitability mitigate financial distress risk, with profitability emerging as the dominant predictor. Conversely, leverage and asset efficiency show no significant individual effects, suggesting that manufacturing firms can adjust their capital structure and asset utilization without necessarily increasing financial distress risk. However, when all four ratios are considered simultaneously, they collectively explain a substantial portion of the variation in financial distress (F = 3.797; p = 0.013; R² = 33.61%). These findings highlight that financial ratio indicators, particularly those related to liquidity and profitability, are useful for evaluating the financial health of established manufacturing firms in Indonesia's LQ45 Index.
Farhan Dzulfiqri, Y. Sudaryo, Nunung Ayu Sofiati et al.· Eduvest - Journal Of Univers...· 0 citations
This study examines the influence of financial ratios and corporate governance mechanisms on financial distress in transportation and logistics companies listed on the Indonesia Stock Exchange over the 2019–2023 period. Financial performance is proxied by the Current Ratio (CR) for liquidity, Return on Assets (ROA) for profitability, and Debt-to-Equity Ratio (DER) for leverage, while Corporate Governance (CG) is measured through the proportion of independent commissioners and audit committee size. Financial distress is assessed using the Altman Z-Score. A purposive sampling technique yielded a final sample of 12 companies, generating 60 firm-year observations. Data were analyzed using descriptive statistics and inferential methods, including classical assumption tests, multiple linear regression, coefficient of determination, F-test, and t-test, with IBM SPSS Statistics version 26 employed for data processing. The empirical findings reveal that the five independent variables, when considered jointly, exert a statistically significant effect on financial distress. Individually, CR, ROA, DER, and the proportion of independent commissioners demonstrate significant partial effects, whereas audit committee size does not exhibit a statistically significant influence. By integrating financial ratios with corporate governance mechanisms, this study provides novel evidence on distress prediction in Indonesia’s transportation and logistics sector, offering theoretical enrichment to the literature on financial distress and practical guidance for managers and regulators in strengthening early‑warning systems.
Sri Sulasmiyati, Annisa Maghfirah· IJBAMS: International Journa...· 0 citations
This causal study examines the effects of the Capital Adequacy Ratio (CAR), Nonperforming Loan ratio (NPL), Return on Assets (ROA), and Loan-to-Deposit Ratio (LDR) on the stock prices of banking companies listed on the Indonesia Stock Exchange from 2018 to 2022. The sample comprises 200 firm-year financial statements from 40 companies selected through purposive sampling over a five-year period. Data were analyzed using statistical software through classical assumption testing, the simultaneous F-test, partial t-tests, the coefficient of determination, and multiple linear regression. The results show that CAR, NPL, ROA, and LDR jointly have a significant effect on banking stock prices. Partially, NPL has a significant negative effect, indicating that higher nonperforming loans reflect deteriorating asset quality and greater credit risk, which may weaken bank profitability, reduce investor confidence, and depress stock prices. ROA has a significant positive effect, indicating that stronger earnings generated from total assets provide a favorable signal to investors. By contrast, CAR and LDR do not have significant partial effects on stock prices. Nevertheless, both ratios remain important in the broader context of capital resilience, liquidity management, cash flow, and bank sustainability.
Cintya Sarah Leanita, Retno Suliati Suleiman· Golden Ratio of Data in Summ...· 1 citation
This study examines the effect of financial distress, measured by the Altman Z-Score, on firm value among property sector companies listed on the Indonesia Stock Exchange during 2022–2024. Liquidity, operating cash flow, and leverage are included as control variables to provide a more comprehensive understanding of the determinants of firm value. Using a quantitative approach, this study employs secondary data obtained from annual financial statements. The sample was selected through purposive sampling, resulting in 132 firm-year observations. Data were analyzed using multiple linear regression with IBM SPSS Statistics 27. The results indicate that the Altman Z-Score, liquidity, operating cash flow, and leverage have positive and significant effects on firm value proxied by Tobin’s Q. These findings suggest that firms with stronger financial health, better short-term solvency, stable operating cash flows, and effective debt management tend to achieve higher market valuations. The study supports signaling theory and agency theory, highlighting the importance of financial information in investors’ assessments of corporate prospects. Practically, the findings imply that managers should maintain financial health, improve operating cash flow quality, and optimize leverage management to enhance firm value and strengthen investor confidence.
Muhammad Figo Yosawiyata, P. Pujiono· Golden Ratio of Auditing Res...· 0 citations