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Research Article Open access CC BY 4.0

The Effect of Institutional Ownership, Managerial Ownership, Liquidity, and Leverage on Financial Distress

Siska Widia Utami, Angela Dirman

Asian Journal of Economics, Business and Accounting · pp. 170–181 · Published 4 Aug 2022

10.9734/ajeba/2022/v22i2130700

Abstract

Aims: This study aims to find empirical evidence and analyze the effect of institutional ownership, managerial ownership, liquidity, and leverage on financial distress. In addition, this research can also be used as a reference for further researchers as well as a reference for stakeholders (investors, creditors, and the government) in making relevant and reliable decisions. Study Design: The method used is quantitative research with secondary data taken from the company's financial statements with data collection techniques using purposive sampling. Place and Duration of Study: The population in this study are manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange during 2018-2020. The number of research samples is 63 data. Methodology: Analysis of the data used is multiple linear regression analysis. Results: The results of this study indicate that: (1) Institutional Ownership has no significant effect on Financial Distress. (2) Managerial Ownership has no significant effect on Financial Distress. (3) Liquidity has a positive and significant effect on Financial Distress. (4) Leverage has a negative and significant effect on Financial Distress.

Ownership structure liquidity leverage financial distress

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