FIRM SIZE SEBAGAI PEMODERASI EFEKTIVITAS RASIO KEUANGAN DALAM MEMPREDIKSI FINANCIAL DISTRESS

Abstract

This research aimed to examine the effect of liquidity, leverage, and profitability on financial distress with firm size as a moderating variable. While liquidity was measured by Current Ratio, leverage was measured by Debt to Equity Ratio, and profitability was measured by Return On Asset. The research was quantitative. Moreover, the data were secondary in the form of companies financial statements. Furthermore, the data collection technique used purposive sampling, in which the sample was based on criteria given. In line with, there were 76 observations from 19 Food and Beverages companies which were listed on Indonesia Stock Exchange during 2016-2019. Additionally, the data analysis technique used multiple linear regression with Moderated Regression Analysis (MRA) and SPSS 21. The research result concluded that liquidity and profitability had a positive effect on financial distress. On the other hand, leverage did not affect financial distress. In addition, firm size intervened and lowered the effect of both liquidity and leverage on financial distress. On the other hand, firm size could not intervene and either strengthen or lower the effect of profitability on financial distress.
Keywords: liquidity, leverage, profitability, financial distress, firm size