Manfaat Laba Dan Arus Kas Untuk Memprediksi Kondisi Financial Distress

Abstract

This study aims to empirically examine and analyze the effect of earnings and cash flows to predict financial distress of the manufacturing companies in the textile and garment sector using financial and non-financial variables. This study used secondary data obtained from the company's financial statements in the period 2009 to 2012 that are listed in the Indonesia Stock Exchange. The results of this study showed that the profit model is strong enough to use as a model for the prediction of financial distress of a company, while the cash flow model can not be used as a predictive model of financial distress of a company because it is statistically insignificant. In other words, it is better to predict financial distress condition defined in terms of profitability than in cash flow.