PENGARUH PROFITABILITAS, LEVERAGE, CAPITAL INTENSITY, DAN ARUS KAS OPERASI TERHADAP FINANCIAL DISTRESS

Abstract

This research aimed to examine the effect of profitability, leverage, capital intensity, and operational cash flow on financial distress which was referred to Altman Z-score (1968) of Transportation companies which were listed on Indonesia Stock Exchange. While the research was quantitative with multiple linear regression as data analysis technique. Moreover, the data collection technique used purposive sampling. In line with that, there were 16 companies which were listed on Indonesia Stock Exchange during 4 years (2017-2020) as the sample. Therefore, there were 64 samples of companies.The research result concluded that profitability (ROA) did not affect financial distress. The higher the profitability did not guarantee that the company would have financial distress. On the other hand, leverage (DAR) had a negative effect on financial distress. The higher the company’s debt could fulfill its asset purchase, spend operational needs, and asset renewal. Likewise, Capital intensity (TAS) had a negative effect on financial distress. The higher the capital intensity would lower financial distress since it could decrease operational cost; by removing the cost for fixed assets expense. On the other hand, operational cash flow (CFS) had a positive effect on financial distress. The higher the operational cash flow would cause financial distress as company’s cash was used to cover some expenses. Therefore, the company could not replace the next sales supply.
Keywords: profitability, leverage, capital intensity, operational cash flow, financial distress