Explain five determinant of possible bank financial distress that could cause bank failure.
In general, caused by external factors and internal factors, but
in this study to be discussed are internal factors only, namely
factors that are within the company itself. Sharpe, Alexander, and
Bailey (2003) states that internal factors include financial and
non-financial factors. Financial factors include the existence of
debt that is too large so that it becomes a heavy fixed burden for
the company, the existence of short-term liabilities greater than
current assets, the slow collection of receivables or the amount
of
bad debt, errors in dividend policy, and insufficient depreciation
funds. While non-financial factors are the existence of errors in
site selection, product determination and determination of business
scale, poor organizational structure, errors in the selection of
company leaders, managerial incompetence (purchasing, sales,
marketing policies)
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