FINANCIAL DISTRESS, DIVIDEND POLICY, RGEC AND EARNING PER SHARE

This study aims to examine and analyze the effect of Financial Distress, Dividend Policy and RGEC on Firm Value with EPS as the intervening variable. This research is explanatory in nature and employs a quantitative descriptive method. The data utilized was gathered from the annual financial reports of commercial banks in Indonesia from 2012 to 2018, with a sample size of 23 bank. The collected data was then analyzed using SEM (Structural Equation Model) and the PLS3 Program. According to the findings of this study, Financial Distress has no influence on firm value or Earnings per share (EPS). The dividend policy and the RGEC have a major impact on EPS. Firm Value is significantly influenced by RGEC and EPS. The connection between Dividend Policy and RGEC on Firm Value can be mediated through EPS. Meanwhile, the EPS variable cannot mediate the influence of Financial Distress on Firm Value. The results of this study imply that the banking sector should pay attention to the company's financial condition to avoid bankruptcy. This study shows that Financial Distress does not affect Firm Value and EPS. This can be used as a reference for banking companies in Indonesia to pay attention to good financial management to maintain EPS and Firm Value. Dividend Policy and RGEC affect EPS in addition to RGEC and EPS Affect Firm Value. These results can be used as a reflection for banking companies to carry out good management of dividend distribution. In addition, the banking assessment from the RGEC side is considered because it will affect EPS which will ultimately affect Firm Value.


INTRODUCTION
Economic conditions in Indonesia experience fluctuating growth every year. This is caused by the challenges of the global economy that have not been resolved so the global economic recovery also slowed down. The banking sector as one of the vital sectors of the Indonesian economy was also affected by this incident. One of the problems in banking companies is liquidity difficulties. Along with the rapid growth of infrastructure, banks began to find it difficult to raise funds while the demand for credit continued to increase. Therefore, Bank Indonesia reduced the primary Statutory Reserves (GWM) by 1% in 2016 which was followed by changes to the regulations for the Average Statutory Reserve in 2017.
The Century Bank case is one of the cases that has attracted the attention of the Indonesian people. This case began with the inability of Century Bank to maintain the capital adequacy ratio (CAR). This was then exacerbated by the maturity of the securities belonging to Century Bank. These two events caused Century Bank to experience serious liquidity problems. The liquidity difficulties continued in the clearing failure or the inability of Century Bank to pay the customer's request funds caused by the failure to provide funds (refund).
Banking as an institution engaged in the financial sector is expected to maintain the trust that customers place in it. Like humans, banking health must be considered so that banks remain excellent in serving their customers. Bank health assessment is very important because banks manage public funds entrusted to banks. Banks that are considered healthy are expected to maintain their health, while banks that are not healthy are expected to immediately treat the causes of their health problems. Banks which according to Bank Indonesia's assessment are categorized as healthy or whose health continues to improve are expected to maintain their health, but for banks that are continuously unhealthy or experiencing financial distress conditions, they must receive direction or even sanctions following applicable regulations.
The increase in the cost of living and the unforeseen needs in the future make people more interested in investing because people expect profits from these investments. Various types of investment are encouraged by various parties to attract public interest, one of which is a bank that offers several products such as stocks. As a consequence of global market investments, the International Finance Corporation (IFC) predicts that investor interest in bonds and stocks would reach US$21 trillion. Rhythm (2018) emphasized that the stock price, which fluctuates in tandem with the company's success, indicates the company's performance. Volume 21, No. 1, June 2022 Bambang Widagdo Chalimatuz Sa'diyah Investors will see and analyze the company's performance first before buying shares to minimize investment losses (Parenrengi & Gems, 2018). The fluctuation of stock prices is impacted by the business's state; if the firm is on the verge of bankruptcy, the stock price will decline (Roykhan 2012). According to research Nicholas, Apergis, Panagiotis, and Vasilios (2011) Enterprises in financial crisis have lower stock prices than firms that are not in financial distress.
Financial distress is a state of financial deterioration that occurs before a firm goes bankrupt (Qoriah and Nurdin 2019). According to Yustika (2015), financial distress is a condition of companies experiencing financial difficulties and unable to meet short-term obligations. The company can go into liquidation if the situation is ignored and not immediately resolved by management because financial distress is an early sign before liquidation occurs. Investors and associated parties will also suffer as a result of the company's inability to maintain financial stability.
The firm's performance may also be shown in the amount of profits received by investors, one of which is Earnings Per Share (EPS). EPS is a profit allocation for each common share that is used to assess a business's capacity to make profits since the greater the EPS, the higher the share price of the company (Khairani 2016). According to research Santosa (2017) and Cahyani and Diantini (2016) EPS has a substantial influence on stock prices.
Another element that influences stock price movements is the soundness of banks as measured by the Risk Based Bank Rating System, This comprises risk profile, good corporate governance, earnings, and capital (RGEC). Putu (2015) conducted research on the impact of the RGEC component on stock price changes and discovered that the RGEC, which includes the Risk Profile, GCG, CAR, and ROA, may be used as a proxy for assessing bank soundness levels that can effect stock price changes. This research is also supported by findings from other studies by Indiani and Dewi (2016) as well as Medyawicesar (2018).
According to Sofiasani and Gautama (2016) Financial distress occurs when a company experiences an unhealthy financial condition. Financial distress is also defined as a condition that begins when a company cannot fulfill its obligations or is indicated by the company's inability to fulfill its obligations for several years to run or continue its business. Financial Distress and usually happens before the company goes bankrupt (Rahmaniah and Wibowo, 2015). If these conditions are not immediately addressed, the company has the potential to experience bankruptcy or liquidation. To forecast the company's financial troubles, this research used a modified Altman Z-Score approach (Andari and Wiksuana, 2017).
Shares are company securities that can be traded in the capital market and are proof of ownership of a company. The value of the company is reflected in its share price and vice versa. Stock prices are highly volatile and are influenced by many things. Stock prices are strongly influenced by fundamental and technical factors. The condition of the company greatly determines changes in the stock price of a company. Companies that have good financial conditions will reflect good stock prices as well. So when the company goes bankrupt, the stock price will also decrease.
Dividend policy is related to decisions regarding whether the profits earned by the company in a certain period will be distributed to shareholders as dividends or otherwise will be withheld and then reinvested in the company. Dividend policy is a policy related to the determination of where the distribution of income or earnings between users of income to be paid to shareholders in the form of dividends or to be used for the company which means that the income must be reinvested in the company. Dividend is one of the returns expected by investors in addition to capital gains.
Bank health is critical and cannot be divorced from banks' ability to progress and build the Indonesian economy, as well as retain public trust. According to Regulation Bank Indonesia No.13/1/PBI/2011, A bank's soundness can be examined using a risk technique known as Risk Based Bank Rating, which consists of (Prianti 2018): Risk Profile: evaluation of inherent risk and the effectiveness of risk management application in bank operations Non-performing loans and loan-to-deposit ratio are indicators of risk; Good Corporate Governance: Bank management's implementation of GCG principles is assessed using a self-assessment composite value based on Bank Indonesia criteria; Earnings: In this study, the ability of banks to produce profits is proxied by Return on Assets and Net Interest Margin; Capital refers to the sufficiency and management of bank capital as measured by the Capital Adequacy Ratio.
The soundness of the bank has an important role and cannot be separated from the function of the bank to develop and advance the Indonesian economy, as well as maintain public trust (Fitrawati, 2016). Noviantari (2017) explains that an assessment of the soundness of a bank can be used to restore public trust, measure credibility and establish a good strategy within the company. So that a financially healthy bank will be able to increase EPS. bank soundness level can be calculated using RGEC.
EPS able to reflect the amount of profit that can increase shareholder confidence in the company (Pritama & Erawati, 2014). According to Rosyidi (2020) EPS is an indicator of net income that can be distributed to shareholders, the higher the EPS value, the greater the interest of investors to buy company shares.
EPS is an important financial measure, which shows the profit ratio of a company. EPS is part of the company's profits that are allocated to each individual who owns shares. The higher the company's earnings per share, the better its profitability. Permata (2018) found that EPS also has a significant effect on stock prices.
The financial difficulties experienced by the company resulted in the company not being able to distribute profits to shareholders which would also have an impact on company value. Novelty in this study is the effect of Financial Distress on Firm Value through EPS. There has been no previous research that examines this relationship, so researchers are interested in studying this.
The dividend policy taken by the company to distribute dividends for the welfare of shareholders will attract investors to buy company shares. The more people who are interested in buying shares, the company's income will increase, which can help the company to increase the distribution of earnings per share. This increase will push the stock price up as well so that the value of the company will also increase. This is very interesting to study because there has been no previous research that has examined this, so it is a novelty in this study.
A good bank soundness level can increase public confidence to continue using the bank's services. The health of the bank, especially on the financial side, will allow banking companies to be able to distribute profits to shareholders. This will increase investor confidence to buy more shares in the company. Researchers are interested in knowing this relationship because it did not exist before, so it can be a novelty in this study.

METHOD
This is an explanatory study that use a quantitative technique to explain or describe quantitative data from bank financial statements (Rahmah 2016). This study uses secondary data collected from Indonesia Stock Exchange (IDX) official website, www.idx.co.id, with a population of all banks commercial listed on Indonesia Stock Exchange from 2012 to 2018, totaling 81 banks. During the 7-year study period, the sampling strategy employed purposive sampling based on certain criteria to acquire a research sample of 23 firms. This study makes use of data documentation from the bank's yearly financial statements, with variables measurement as showed in Table 1. Earnings Per Share is net profit after tax divided by the number of outstanding shares and is represented in rupiah (IDR) (Pryanka, Polii, and Yunita 2014).

Distress (FD)
Financial distress is an unhealthy financial condition of the company and usually occurs before the bankruptcy of the bank (Rahmaniah and Wibowo 2015). Z = 6.56 X 1 +3.26 X 2 +6.72 X 3 + 1.05 X 4 (Gebreslassie 2015) X 1 = Working Capital : Total Assets; X 2 = Retained Earnings : Total Assets; X 3 = Profit Before Interest and Tax on Total Assets; X 4 = Book Value of Equity to Total Liabilities; Z = Z-Score Dividend Policy (DPS) Dividend Policy In this study, the proxy for the DPS is the ratio of dividends per share to earnings per share.

Earning Per Share
Capital Adequacy Ratio, which is the capital adequacy ratio that can account for the risk of bank losses (Wismaryanto 2013) Capital Adequacy Ratio (CAR) = Capital

Risk Weighted Assets
Non Performing Loans (NPL) is a ratio that compares the quantity of non-performing loans to the total number of bank loans (Warsa and Mustanda 2016)

NPL = 100% x Total Non Performing Loans (NPL)
Total Loan Disbursed

RGEC
The Loan to Deposit Ratio is the ratio of the amount of credit given to the quantity of third-party money (Dewi and Sulindawati. 2015) Loan to Deposit Ratio (LDR) = Total Loan Disbursed

Third Part Funds
Return on Assets is a ratio used to assess a bank's capacity to generate total profit (Noviantari, 2017). ROA = 100% x Earnings Before Tax

Total Assets Average
Net Interest Margin is a statistic that measures a company's capacity to produce interest from its producing assets (Indiani and Dewi 2016).

NIM = 100% x Net Interest Income
Average Earning Assets

RESULTS
The Partial Least Square (PLS) method is used in this study with a variance-based or component-based approach model. The PLS method is used to test the findings of structural equation modeling by comparing the results of the measurement model and the results of the structural model of the model under investigation (Figure 1).

RGEC
Comparing the AVE root value of each concept with the correlation between constructs may be used to determine discriminant validity. The discriminant validity of a construct is determined by comparing its square root value of the mean extract (AVE) to the correlation between the construct and the other constructs in the model. It is considered to have strong discriminant validity if the value of the square root of AVE is greater than the correlation value between the constructs and other constructs. The findings of discriminant validity tests are shown in the Table 2. According to the Table 2, all constructions are distinct from one another. The diagonal depicts the square root of each construct's AVE value, and the correlation value of the construct is greater than the other correlation values between constructs. R 2 may be used to calculate the degree of variance between changes in the independent variable and changes in the dependent variable. The greater the R 2 score, the better the proposed research model's prediction model (Table 3). According to the coefficient of determination (R-Square), FD, DPR, RGEC, and EPS impact FV by 69.4 percent, while the remaining 30.6 percent is influenced by additional factors not included in the model. The R-Square EPS value of 65.4 percent indicates that ROA is a rather strong mediating variable since it is impacted by exogenous factors such as FD, DPR, and RGEC.

DISCUSSIONS
The statistical value of the Dividend Policy variable on EPS is 5,621 (Table 6). This number is larger than 1.96, implying that Dividend Policy has a positive influence on EPS. Based on the third hypothesis testing which states that the positive effect of the Dividend Policy on EPS, it can be said that the dividend policy made by the company will affect the profits per share that investors get. If the company makes a policy to increase the dividend per share, the profit per share will also increase. Dividends are one of the benefits that can be obtained by investors, so the higher the dividends given by the company, the profits of investors will increase. The results of this study are in line with research conducted by (Banerjee 2018), (Indriawati, 2018) and (Anggoro, 2018). This is not in line with research (Saputri and Krisnawati, 2020) and (Pernamasari, 2020).
The statistical value of the Financial Distress variable on Firm Value is 0.608 based on the Table 4. Because this number is less than 1.96, we may conclude that Financial Distress has no influence on Firm Value. Based on the first hypothesis testing, which shows that Financial Distress has no influence on Firm Value, it can be stated that the company's financial troubles are not always reflected in its value. The stock price in this research describes the company's worth. So that when a banking company experiences financial difficulties, it will not necessarily affect or reduce the value of the stock price owned by the company. The results of this study are in line with (Ndicu, 2018) and (Gandhi, Loughran, and McDonald, 2017). This is not in line with research (Vo et al. 2019).
The statistical value of the Financial Distress variable on EPS is 0.711 (Table 5). Because this number is less than 1.96, we can infer that Financial Distress has no influence on EPS. Based on the second hypothesis testing which states that Financial Distress has no effect on EPS, it can be said that the financial difficulties experienced by the company have no effect on Earning Per Share or earnings per share obtained by investors. The results of this study are in line with (Rafatnia et al., 2020) and (Humeedat, 2018). This is not in line with research (Pernamasari, 2020) and (Fahlevi and Marlinah, 2019). The statistical value of the RGEC variable on EPS is 5,938 (Table 7). This number is larger than 1.96, indicating that RGEC has a positive influence on EPS. Based on the fourth hypothesis testing, which says that RGEC has a positive influence on EPS, it can be stated that the bank's soundness contributes significantly to the growth in profits per share that investors will get. The results of this study are in line with (Lestari, Tripuspitorini, and Setiawan 2020), (Habbi and Harto, 2019), (Aghe, 2020), (Haq, 2019) and (Wahasusmiah and Watie, 2019). This is not in line with research (Saputri and Krisnawati, 2020) and (Alvidianita and Rachmawati, 2019). Volume 21, No. 1, June 2022 Bambang Widagdo Chalimatuz Sa'diyah According to Table 8, the statistical value of the RGEC variable on Firm Value is 4,449. This number is larger than 1.96, indicating that RGEC has a positive influence on firm value. According to the fifth hypothesis testing, which indicates that RGEC has a positive influence on Firm Value, the company's health level would affect firm value. The better the level of health of a company, the value of the company will also be good. The results of this study are in line with research conducted by (Damayanti, 2020), (Ardianingtyas, 2020) and (Azeharie et al. 2017). This is not in line with research (Saputri and Krisnawati, 2020) and (Alvidianita and Rachmawati, 2019).
The statistical value of the EPS variable on Firm Value is 14,473 (Table 9). Because this number is larger than 1.96, it can be inferred that EPS has a positive influence on firm value. According to the sixth hypothesis testing, which indicates that EPS has a positive influence on firm value, high earnings per share will affect firm value. Investors feel that the company is able to provide good profits for shareholders, so investors will be interested in reinvesting which will have an effect on increasing share prices. The results of this study are in line with research conducted by (Yemi and Seriki 2018) and (Rafatnia et al. 2020). This is not in line with research (Saputri and Krisnawati 2020) and (Pernamasari 2020).
According to Table 10 the statistical value of the Financial Distress variable on Firm Value as mediated by EPS is 0.706. This result is less than 1.96, implying that EPS does not moderate the connection between Financial Distress and Firm Value. The results of this study are in line with research conducted by (Yemi and Seriki 2018) and (Rafatnia et al. 2020). This is not in line with research (Saputri and Krisnawati 2020) and (Pernamasari 2020). The statistical value of the DPR variable on Firm Value mediated by EPS is 5,125 (Table 11). This result is larger than 1.96, implying that the EPS variable can mediate the influence of Dividend Policy on Firm Value. The results of this study are in line with research conducted by (Banerjee 2018), (Indriawati 2018) and (Anggoro 2018). This is not in line with research (Saputri and Krisnawati 2020) and (Pernamasari 2020).  (Damayanti 2020), (Ardianingtyas 2020) and (Azeharie et al. 2017). This is not in line with research (Saputri and Krisnawati 2020) and (Alvidianita and Rachmawati 2019).
The results of this study imply that the banking sector should pay attention to the company's financial condition to avoid bankruptcy. This study shows that Financial Distress does not affect Firm Value and EPS. This can be used as a reference for banking companies in Indonesia to pay attention to good financial management to maintain EPS and Firm Value. Dividend Policy and RGEC affect EPS in addition to RGEC and EPS Affect Firm Value. These results can be used as a reflection for banking companies to carry out good management of dividend distribution. In addition, the banking assessment from the RGEC side is considered because it will affect EPS which will ultimately affect Firm Value.
EPS is not able to mediate the relationship between Financial Distress and Firm Value, besides that EPS can mediate the effect of Dividend Policy and RGEC on Firm Value. These results are the novelty of this study because there has been no previous research that has tested the mediation of these variables. Banks that have a good level of health will attract investors so that the stock price of the bank will be high. A larger EPS will encourage investors to buy the company's shares because investors think the company has a better profit compared to its share price. Prospective investors who will buy shares in banking companies should make a prior assessment of the EPS and the health of banking companies so that investment risk can be minimized.

CONCLUSIONS
According to the findings of this study, financial distress has no influence on firm value or earnings per share (EPS). The dividend policy and the RGEC have a major impact on EPS. Firm Value is significantly influenced by RGEC and EPS. The connection between Dividend Policy and RGEC on Firm Value can be mediated through EPS. Meanwhile, the EPS variable does not mediate the influence of Financial Distress on Firm Value. The contribution of the results of this study is for investors to pay more attention when they want to invest in banking companies. It is better to choose a good banking company in terms of financial fundamentals. For banking companies should always maintain good company management so as not to experience financial difficulties. For further researchers, it is better to conduct research by adding other research variables that have not been studied in this study. Volume 21, No. 1, June 2022