FINANCIAL DISTRESS ANALYSIS USING EXTENDED SEBRA MODEL TO PREDICT THE BANKING SOUNDNESS

Abstract

Abstract: Financial Distress Analysis Using Extended SEBRA Model to Predict The Banking Soundness. This research aims to see the influence of six variables in the extended SEBRA Model, they are earnings, equity, liquidity, unpaid tax to total assets, firm size, and firm age. This research was conducted at conventional commercial banks listed on the Indonesia Stock Exchange. The sampling technique used was purposive sampling technique. The financial distress in this research is proxied as the soundness value of the bank of each bank in the year concerned. The results of this research are the earnings ratio has a positive effect on financial distress, the liquidity ratio has a negative effect on financial distress, while the other four variables which include equity ratio, unpaid tax to total assets, firm size, and firm age have no effect on financial distress. Meanwhile, simultaneously, extended SEBRA Model affecting financial distress as much as 63.2% and the rest is influenced by other factors.

Keywords: Financial Distress, SEBRA Model, Financial Ratios, Conventional Banks