Proceedings of the 2nd Lekantara Annual Conference on Public Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE 2022, 29 October 2022, Malang, East Java, Indonesia

Research Article

The Hospital Financial ROA (ROA) and Financial Distress during Probability Covid-19 Pandemic

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  • @INPROCEEDINGS{10.4108/eai.29-10-2022.2334016,
        author={Muthmainnah  Muthmainnah and Ernawaty  Usman},
        title={The Hospital Financial ROA (ROA) and Financial Distress during Probability Covid-19 Pandemic},
        proceedings={Proceedings of the 2nd Lekantara Annual Conference on Public Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE 2022, 29 October 2022, Malang, East Java, Indonesia},
        publisher={EAI},
        proceedings_a={LEPALISSHE},
        year={2023},
        month={7},
        keywords={financial distress roa indonesia hospital covid-19 pandemic},
        doi={10.4108/eai.29-10-2022.2334016}
    }
    
  • Muthmainnah Muthmainnah
    Ernawaty Usman
    Year: 2023
    The Hospital Financial ROA (ROA) and Financial Distress during Probability Covid-19 Pandemic
    LEPALISSHE
    EAI
    DOI: 10.4108/eai.29-10-2022.2334016
Muthmainnah Muthmainnah1,*, Ernawaty Usman2
  • 1: Universitas Yapis Papua
  • 2: Universitas Tadulako
*Contact email: m_mainnah@yahoo.com

Abstract

Not much research has been done on financial distress related to the COVID-19 pandemic; we tried to fill the gap with the present study. We were interested in examining the effect of profitability, cash flow from operating activities (CFO), and managerial ownership. We used the literature review method to collect data and information about financial distress. Data came from databases such as PubMed, ScienceDirect, and Garuda. Then we used PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analysis) to obtain the desired articles for research. Our search on Google Scholar with the keywords “Financial Contamination Return on Assets (ROA)” and “Financial Distress” resulted in 35 international journal articles published from 2015 to 2022. They were reviewed in this study. The profitability variable, as proxied by ROA, has been shown to negatively affect the probability of financial distress in the hospital sector during the COVID-19 pandemic. This shows that the company’s ability to profit using its assets indicates financial distress probability. As proxied by the Operating Cash Flow Ratio (OCFR), CFO has positively affected the financial distress probability of hospitals during the Covid-19 pandemic. Thus, the company’s ability to pay off current liabilities using cash flows from its activities can indicate financial distress probability.