DETERMINANTS OF FINANCIAL DISTRESS: ANALYSIS OF DEBT TO EQUITY RATIO AND COMPANY SIZE IN THE BANKING SECTOR LISTED ON THE INDONESIA STOCK EXCHANGE IN 2020–2024

Authors

  • Neng Mesa University of Informatics and Business Indonesian
  • Astari Dianty University of Informatics and Business Indonesian
  • Johannes Kristian Siregar University of Informatics and Business Indonesian

Keywords:

Banking Sector, Debt to Equity Ratio, Financial Distress, Firm Size, Indonesia Stock Exchange

Abstract

This study is based on increasing pressure on Indonesian banking sector listed on the Indonesia Stock Exchange during 2020–2024. This study aims to examine the effect of Debt to Equity Ratio (DER) and firm size on distress in banking companies. The banking sector faced increased financial pressure during this period due to global economic slowdown and post pandemic recovery challenges which heightened financial risk exposure. Financial distress is measured using the Altman Z-Score. DER is calculated as total liabilities divided by equity, while firm size is measured by the natural logarithm of assets. This study uses a quantitative approach with secondary data from annual reports. Purposive sampling resulted in 31 banking companies, producing 155 firm observations. Data were analyzed using multiple linear regression. The results show that DER has a negative and significant effect on financial distress, while firm size has a positive and significant effect. Simultaneously, DER and firm size significantly affect financial distress. These findings indicate that higher leverage increases financial risk, while larger firms tend to have greater stability. This study provides implications for investors, regulators, and management in identifying early warning signals of distress. The findings contribute to risk assessment and support decision making to maintain banking sector stability and sustainable performance in Indonesia. This research enriches empirical literature by providing evidence from post pandemic conditions and offers insight for improving financial monitoring and institutional resilience within emerging capital markets.

 

References

Agustin, M. (2024). PENGARUH UKURAN PERUSAHAAN, EFISIENSI OPERASI, DAN PERTUMBUHAN PENJUALAN TERHADAP FINANCIAL DISTRESS . Jurnal Ilmu dan Riset Akuntansi, 1-14.

Annur, C. M. (2024, Februari 6). Inilah 10 Sektor Utama Penopang Ekonomi Indonesia pada 2023, Industri Pengolahan Terbesar. Retrieved from databoks.katadata.co.id: https://databoks.katadata.co.id/ekonomi-makro/statistik/826961544a2f687/inilah-10-sektor-utama-penopang-ekonomi-indonesia-pada-2023-industri-pengolahan-terbesar

Bernadin, D. E., Fitria, Y. Z., & Lestari, L. (2024). PENGARUH PROFITABILITAS, LEVERAGE, TOTAL ARUS KAS,DAN UKURAN PERUSAHAAN TERHADAP FINANCIAL DISTRESS. Jurnal Financia, 52-59.

Fahmi, I. (2020). Analisis Laporan Keuangan. Bandung: ALFABETA.

Fauzela, D. S., & Budi, A. A. (2023). PERANAN PERBANKAN DALAM MENGHADAPI PENGARUH . JURNAL KELITBANGAN, 291.

Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25. Semarang: Badan Penerbit Universitas Diponegoro.

Hariono, A. F., & Azizuddin, I. (2022). The Analysis of Financial Performance on Sharia Banks' Financial Distress in Indonesia for the Period 2016-2020. Jurnal Ekonomi Syariah Teori dan Terapan, 273-285.

Hariyani, E., Wiguna, M., & Hardi. (2021). Prior Opinion, Debt Default dan Ukuran Perusahaan . Jurnal Politeknik Caltex Riau, 272.

Junaidi. (2016). PENGUKURAN TINGKAT KESEHATAN DAN GEJALA FINANCIAL DISTRESS . KINERJA, 43.

Kaok, M., & Akbar, N. A. (2023). Pengaruh Net Profit Margin, Return On Asset, Dan Return On Equity Terhadap Financial Distress Pada Perusahaan Food and Beverage Yang Terdaftar Di Bursa Efek Indonesia Tahun 2018-2020. Musamus Accounting Journal, 70-85.

Nasution, U. O., Aprilia, I., & Utami, D. (2023). Pengaruh Ukuran Perusahaan Dan Pertumbuhan Penjualan Terhadap Financial Distress. Jurnal Ekonomi Manajemen Akuntansi Keuangan Bisnis Digital, 1-10.

Oktavianti, B., Hizai, A., & Mirdah, A. (2020). PENGARUH LIKUIDITAS, PROFITABILITAS, LEVERAGE DAN UKURAN PERUSAHAAN TERHADAP FINANCIAL DISTRESS PADA PERUSAHAAN PERTAMBANGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE TAHUN 2015-2018 . Jambi Accounting Review (JAR), 20-34.

Pratama, J. T., & Evelyn. (2023). PENGARUH RASIO HUTANG, PROFIT MARGIN, UKURAN PERUSAHAAN,DAN LIKUIDITAS TERHADAP FINANCIAL DISTRESS PADAPERUSAHAAN PROPERTI, REAL ESTATE, DAN KONSTRUKSI YANG TERDAFTAR DI BEI. Jurnal Manajemen Dewantara, 83-94.

Raihan, M. F., & Imronudin. (2025). ANALISIS PENGARUH NET PROFIT MARGIN, DEBT TO EQUITY RATIO, OPERATING CASH FLOW, DAN INFLASI TERHADAP FINANCIAL DISTRESS PADA PERUSAHAAN SEKTOR ENERGI YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2020-2023. JURNAL KELITBANGAN, 13-28.

Sanny, B. I., & Dewi, R. K. (2020). Pengaruh Net Interest Margin (NIM) Terhadap Return on Asset (ROA) Pada PT Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk Periode 2013-2017. Jurnal E-Bis (Ekonomi-Bisnis), 78-87.

Sari, Y. (2020). Pengaruh Rasio Profitabilitas Terhadap Financial Distress Pada Bank Umum Syariah di Indonesia.

Sartika, T. P., Hidayat, M., & Siregar, M. I. (2022). Pengaruh Rasio Camel Terhadap Financial Distress Pada Perusahaan Perbankan di Indonesia. Jurnal Media Wahana Ekonomika, 335-344.

Sugiyono. (2022). Metode Penelitian Kualitatif. Bandung: Alfabeta.

Theodorus, S., & Artini, L. G. (2018). STUDI FINANCIAL DISTRESS PADA PERUSAHAAN PERBANKAN DI BEI. E-Jurnal Manajemen Unud, 2710-2732.

Ulfa, S. N., Fitrisia, A., & Fatimah, S. (2024). BERFIKIR TEORITIS DAN GRAND TEORI DALAM ILMU SOSIAL. Jurnal Ilmu Pengetahuan, 533-539.

Downloads

Published

2026-06-09

Issue

9th National Conference Business, Management, and Accounting

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.