The Determinants Of Financial Distress In The Case Of Manufacturing Share Companies In Addis Ababa Ethiopia

The major focus of this study is to investigate empirically financial distress determinants in the case ofrnmanufacturing share companies in Addis Ababa-Ethiopia. Twelve manufacturing share companies were includedrnin the sample that had at least five years annual report. Document review was used for collecting data from 2009-rn2013 annual reports. In line with this objective, the study adopted quantitative methods of research approaches torntest the study hypothesis. The study applied panel data model with its random effect estimate to test a series ofrnhypotheses that emerge through the review of existing literature. To confidently forward conclusion, normality,rnmulticollinearity, heteroscedastcity and autocorrelation tests were conducted on the data. The data then wasrnprocessed using Eviews 6 statistical package. The collected data then analyzed using descriptive statistics, andrnpanel date regression analysis. The results show that solvability (SOL), firm size (FSIZE), economicrngrowth(EG) and liquidity(LI) have positive and significant influences to Debt Service Coverage (DSC) as arnproxy of financial distress. On the other hand, leverage (Lev) has a negative and significant relation withrnDSC. Other variables such as profitability, efficiency and inflation have no significant impact on the statusrnof firm’s financial distress in manufacturing share companies in Addis Ababa-Ethiopia

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