PENGARUH RASIO EFISIENSI, KEMANDIRIAN KEUANGAN, RASIO EFEKTIVITAS TERHADAP FINANCIAL DISTRESS

Abstract

Financial distress is a condition where the local government has financial difficulties, so that it cannot fulfill its fiscal obligations. This research aims to determine the effect of efficiency ratio, financial indepnendence, and effectiveness ratio on financial distress. The research applies quantitatively. Futhermore, the data collection technique used total sampling, in which all members of the population fulfill the criteria of a sample. The population consistof 38 districts/cities in East Java Province with an observation period of 2020-2022. Moreover, the data were from the Realization report of APBD from all districts/cities in East Java Province. They were taken from the official website of the Directorate of General of Fiscal Balance (DJPK), Statistics Indonesia (BPS) of East Java Province, and each of their websites in districts/cities during 2020-2022. In addition, the data analysis technique used multiple linear with SPSS 26 versions. The result indicates that the efficiency ratio does not affect financial distress. However, financial independence has a negative effect on financial distress, while the effectiveness ratio has a positive impact on financial distress.
Keywords: efficiency ratio, financial independence, effectiveness ratio, financial distress.