Proceedings of the 5th International Public Sector Conference, IPSC 2023, October 10th-11th 2023, Bali, Indonesia

Research Article

The Analysis of Agency Costs and Profitability on Effecting Financial Distress

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  • @INPROCEEDINGS{10.4108/eai.10-10-2023.2342162,
        author={Ni Putu Ayu Mirah  Mariati and Putu Diah  Kumalasari and Gde Bagus Brahma  Putra and Ida Ayu Lidya Primadona},
        title={The Analysis of Agency Costs and Profitability on Effecting Financial Distress},
        proceedings={Proceedings of the 5th International Public Sector Conference, IPSC 2023, October 10th-11th 2023, Bali, Indonesia},
        publisher={EAI},
        proceedings_a={IPSC},
        year={2023},
        month={12},
        keywords={financial distress agency costs profitability},
        doi={10.4108/eai.10-10-2023.2342162}
    }
    
  • Ni Putu Ayu Mirah Mariati
    Putu Diah Kumalasari
    Gde Bagus Brahma Putra
    Ida Ayu Lidya Primadona
    Year: 2023
    The Analysis of Agency Costs and Profitability on Effecting Financial Distress
    IPSC
    EAI
    DOI: 10.4108/eai.10-10-2023.2342162
Ni Putu Ayu Mirah Mariati1,*, Putu Diah Kumalasari1, Gde Bagus Brahma Putra1, Ida Ayu Lidya Primadona1
  • 1: Universitas Mahasaraswati Denpasar
*Contact email: ayumirahmariati@unmas.ac.id

Abstract

This research aims to determine the effect of agency costs and profitability on financial distress in manufacturing companies on the Indonesia Stock Exchange (IDX) in 2018-2020. This research involved a population of 169 manufacturing companies on the IDX in 2018-2020. This research determines the sample using purposive sampling technique, so the total samples are 144 companies. This research tested the hypothesis with multiple linear regression analysis. The results show that agency costs and profitability have a positive effect on financial distress. Further research is recommended to identify or examine other variables that can complement the explanation of factors that influence financial distress, such as leverage, liquidity, operating capacity, sales growth, good corporate governance, and other variables