PENGARUH PROFITABILITAS, SOLVABILITAS, LIKUIDITAS DAN UKURAN PERUSAHAAN TERHADAP FINANCIAL DISTRESS

Abstract

This research aimed to examine the effect of profitability, solvability, liquidity and firm size on the
distressed financial condition. Profitability was measured by Return On Assets. Furthermore,
solvability was measured by the Debt Asset Ratio. Liquidity was measured by the current ratio.
meanwhile, the firm size used the Log natural of total assets. This research used the quantitative
method. The research sample used purposive sampling, a sample selection based on the determined
criteria. By the purposive sampling obtained 21 retail companies were listed on Indonesia Stock
Exchange in the research periods for 5 years in the 2016-2020 period, therefore the overall sample
was 105 company’s samples. The research result showed that profitability proxied by return on assets
had a negative effect on the financial distress. Solvability was proxy with debt assets ratio had a
negative effect the financial distress. Liquidity was proxy with current ratio had a negative affect the
financial distress. Meanwhile, the firm size was proxy with log natural total asset did not affect the
financial distress.