PENGARUH PROFITABILITAS, LEVERAGE, ARUS KAS DAN UKURAN PERUSAHAAN TERHADAP KONDISI FINANCIAL DISTRESS

Abstract

This research aimed to examine the effect of profitability, leverage, cash flow and firm size on financial distress of manufacturing companies which were listed on Indonesia Stock Exchange (IDX) during 2015-2019. While profitability was measured by Return On Equity, leverage was measured by Debt to Asset Ratio, cash flow was measured by operational activity and firm size was measured by log total assets. The research was quantitative with company's financial statements as primary data. Moreover, the data collection technique used purposive sampling. In line with, there were 110 samples from 22 manufacturing companies. Furthermore, the data analysis technique used logistics regression analysis with SPSS 25. The research result concluded that profitability had a negative and significant effect on financial distress. This meant the higher the profitability was, the more efficient companies in managing their capital; by using equity in having some profits would be. On the other hand, leverage had a positive and significant effect on financial distress. It meant the higher leverage was, the more debts used by companies to earn their assets would be. In contrast, cash flow and firm size did not effect financial distress.
Keywords: profitability, leverage, cash flow, firm size, financial distress