Horizontal Financial Ratio Analysis to Estimate the Chronological Period of Financial Difficulties at PT Garuda Indonesia 2013-2021

PT Garuda Indonesia is one of the state-owned companies experiencing financial distress because of complex. Financial distress condition can be analyzed based on financial statements. This article aims to investigate the financial performance of the company by using horizontal analysis of financial ratio to estimate chronological period of financial difficulties at PT Garuda Indonesia in 2013-2021. Financial distress that is not managed properly will effect to bankrupt condition. This study uses financial ratio that are liquidity ratio, solvability ratio, and profitability ratio to evaluate the financial distress condition of PT Garuda Indonesia. Data was obtained from financial position statement and income statement. The results of research shown that In 2013 the company has experienced illiquid continuously until 2021. This is an early signal of financial difficulties occurring. In 2014, there was an insolvency until the end of the analysis year.  Losses occurred in 2014, but the next 2 years experienced gains. Continuous losses occurred from 2017 to 2021. Illiquid, insolvency, and losses aggravated the condition of financial difficulties so that PT Garuda is currently in a insolvency bankrupt condition. Professional and integrated financial management is needed so that problems can be resolved immediately

My word is my bond ; reputation as collateral in nineteenth century English provincial banking

There are few real-world economic transactions that do not involve an element of trust, yet in textbook economics trust is not prominently discussed. In that world, perfectly informed and computationally endowed agents reach optimal, enforceable decisions in continuously harmonizing exchanges. Trust is therefore linked to deviations from the textbook ideal: incomplete information, costly enforcement, and computational limitations faced by agents. Trust can then be thought of as an algorithm, in other words, a way of resolving uncertainty in a complex world. In this sense trust may be seen as a form of expectation concerning the behavior of other agents whose actions and intentions cannot be (fully) observed. This paper pursues this approach by “running the algorithm backwards” and trying to establish what factors led a 19th century provincial English bank to trust different loan applicants. Using a data-set of some 200 loan decisions, and knowing the size of collateral (if any) requested, we develop a method to estimate the probability that the bank attached to each borrower’s promise to repay (i.e., the trust the bank had towards the borrower), adjusting for stages in the business cycle. We then regress this estimated probability on a variety of observable borrower characteristics. We find that trust is not correlated with a priori expected variables, such as borrower’s assets or frequency of interaction. This suggests that trust was built up in other interactions, possibly through social or religious networks, and that the banking relationship reflected information available to bank directors other than what was purely pertinent to the borrowers’ economic conditions. This has strong implications for the allocation of credit to industry in 19th century England.