Financial Distress Analysis in Manufacturing Companies using The Panel Vector Auto Regression (PVAR) Approach
Abstract
A good company's financial condition will attract investors in their investment decisions, managers in their financial decisions, and Current Ratioeditors in supporting their funding decisions. If the company's financial condition is bad and has an impact on the company's fate, then external parties will not want to work with the company because the company is on the verge of bankruptcy. This study aims to determine the effect of profitability ratios, liquidity ratios, and leverage ratios on financial distress. This study uses the Panel Vector Auto Regression (PVAR) approach, which concludes that the liquidity ratio proxied by the current ratio has a greater influence on financial distress than other variables.
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