The Impact of Financial Distress, Size, Roa on Firm Value: An Evidence from Cosmetic and Household Companies Listed at Indonesian Stock Exchange

Abstract

This study examines the relationship of financial distress model of Zmijewski and size, and return on asset towards firm value of cosmetic companies publicly listed at Indonesian Stock Exchange. This study utilizes Zmijewski measurements of financial distress, and return on asset for profitability ratios, and for firm value the study utilize price:earning ratio. Using statistical analysis, the result of this study shows that Zmijewski and size, and return on asset of cosmetic companies is significantly associated with their firm value. The results of this study contributes to the existing theory and empirical evidence of firm value and its predictors. Using statistical analysis, the study finds that the financial distress, size and Roa is associated with firm value. Limitations of the present study lie on earning management measurement and also bankruptcy potential measurement of Zmijewski