The Effect of Perceived Financial Condition on Business Crisis Risk of Layer Chicken Farms
Yahdi Briliant Rifandiraja (a), Jaisy Aghniarahim Putritamara (b*)

Faculty of Animal Science and Technology, Universitas Brawijaya

Abstract

Smallholder layer chicken farms need effective financial risk assessment pathways to maintain business resilience against volatile feed costs and market prices. This study assessed the effect of perceived financial
condition across five dimensions: liquidity, solvency and financial burden, profitability, efficiency and business activity, and growth and stability, on business crisis risk among smallholder layer chicken farms in
Kademangan District, Blitar Regency, East Java, Indonesia. Data were gathered in August 2026 through a cross-sectional survey using multistage sampling. From 200 interviewed farmers, complete responses from 190 independent layer farmers meeting eligibility criteria were processed and analyzed. Perceived financial condition was measured using 19 items scored on a 1 to 5 Likert scale, adapted from established accounting crisis predictor ratios. Business crisis risk was operationalized as a binary dependent variable (1 = crisis-at-risk, 0 = non-crisis) based on a mean score threshold of greater than 3.00 across five financial distress indicators. Instrument validity (r-count greater than r-table) and reliability (alpha greater than 0.60) were confirmed. Data were evaluated descriptively and through binary logistic regression to estimate simultaneous (Likelihood Ratio test) and partial (Wald test, Odds Ratio) effects, alongside model fit (Hosmer-Lemeshow test) and explanatory power (Nagelkerke R2). The framework highlights liquidity management, feed efficiency, and debt containment as primary determinants of smallholder financial sustainability in key poultry production centers.

Keywords: Layer chicken farm - Perceived financial condition - Business crisis risk - Financial distress - Binary logistic regression - Smallholder farming

Topic: Agribusiness and related subjects