Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah

The effect on economy of businesses and banks failure is excessive, especially to the parties who will bear the consequences such as shareholders, managers, and employees. Businesses and banks failure indicate that they are financially distress when they are unable to meet its financial obligations...

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Main Author:	Hamzah, Intan Suhayza
Format:	Thesis
Language:	English
Published:	2021
Subjects:	Credit Debt Loans Financial leverage
Online Access:	https://ir.uitm.edu.my/id/eprint/106372/1/106372.pdf
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id	my-uitm-ir.106372
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spelling	my-uitm-ir.1063722024-12-15T02:43:19Z Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah 2021-07 Hamzah, Intan Suhayza Credit. Debt. Loans Financial management. Business finance. Corporation finance Financial leverage The effect on economy of businesses and banks failure is excessive, especially to the parties who will bear the consequences such as shareholders, managers, and employees. Businesses and banks failure indicate that they are financially distress when they are unable to meet its financial obligations as at when due. Financial distress companies usually have higher credit risk than those companies who are not in distressed since credit risk is associated with the risk of inability of a counterparty to perform its obligations. In Malaysia, companies that are listed in Bursa Malaysia but in distressed state are listed in PNI 7 and GN3 lists. The aim of this study is to examine the determinants of credit risk of financially distressed companies in Malaysia by using financial ratios as suggested by Altman (1968) which are liquidity, leverage, profitability, and efficiency. The credit risk ratio is used to assess the factors that affecting company's financial stability. Financial data was collected from financial statements from 2010 to 2019 as part of a descriptive research design. Finding from this study states that credit risk of distressed companies in Malaysia is based on financial leverage, where the higher the debt, the higher the dependency of the firm to debt financing, thus lead to financial distress and liquidity level where even firms that have high ability to convert its assets into cash, they do not necessarily can cover their obligations as at due, leads to higher credit risk. The result of this study will be useful to managers and owners of the companies, existing and potential shareholders, and the Government on the matter of controlling, reducing, and avoiding the credit risk. 2021-07 Thesis https://ir.uitm.edu.my/id/eprint/106372/ https://ir.uitm.edu.my/id/eprint/106372/1/106372.pdf text en public degree Universiti Teknologi MARA, Johor Faculty of Business and Management Hamid Ghul, Zahirah
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Hamid Ghul, Zahirah
topic	Credit Debt Loans Credit Debt Loans Financial leverage
spellingShingle	Credit Debt Loans Credit Debt Loans Financial leverage Hamzah, Intan Suhayza Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
description	The effect on economy of businesses and banks failure is excessive, especially to the parties who will bear the consequences such as shareholders, managers, and employees. Businesses and banks failure indicate that they are financially distress when they are unable to meet its financial obligations as at when due. Financial distress companies usually have higher credit risk than those companies who are not in distressed since credit risk is associated with the risk of inability of a counterparty to perform its obligations. In Malaysia, companies that are listed in Bursa Malaysia but in distressed state are listed in PNI 7 and GN3 lists. The aim of this study is to examine the determinants of credit risk of financially distressed companies in Malaysia by using financial ratios as suggested by Altman (1968) which are liquidity, leverage, profitability, and efficiency. The credit risk ratio is used to assess the factors that affecting company's financial stability. Financial data was collected from financial statements from 2010 to 2019 as part of a descriptive research design. Finding from this study states that credit risk of distressed companies in Malaysia is based on financial leverage, where the higher the debt, the higher the dependency of the firm to debt financing, thus lead to financial distress and liquidity level where even firms that have high ability to convert its assets into cash, they do not necessarily can cover their obligations as at due, leads to higher credit risk. The result of this study will be useful to managers and owners of the companies, existing and potential shareholders, and the Government on the matter of controlling, reducing, and avoiding the credit risk.
format	Thesis
qualification_level	Bachelor degree
author	Hamzah, Intan Suhayza
author_facet	Hamzah, Intan Suhayza
author_sort	Hamzah, Intan Suhayza
title	Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
title_short	Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
title_full	Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
title_fullStr	Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
title_full_unstemmed	Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah
title_sort	determinants of credit risk of distressed companies in malaysia / intan suhayza hamzah
granting_institution	Universiti Teknologi MARA, Johor
granting_department	Faculty of Business and Management
publishDate	2021
url	https://ir.uitm.edu.my/id/eprint/106372/1/106372.pdf
_version_	1818588180241186816

Determinants of credit risk of distressed companies in Malaysia / Intan Suhayza Hamzah

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