PENGARUH KINERJA KEUANGAN DAN UKURAN PERUSAHAAN TERHADAP FINANCIAL DISTRESS

Abstract

This research aimed to observe the manufacturing company listed on Indonesia Stock Exchange (IDX) in the 2014-2020 periods, to predict the company which had financial distress with several variables which were profitability, liquidity, leverage, firm size and financial distress. Based on the purposive sampling it obtained 13 companies by criteria i.e. 91 samples. Furthermore, this research used secondary data which was obtained from the official website of the Indonesia Stock Exchange (IDX) i.e. www.idx.co.id. Moreover, this research used logistic regressions analysis with data processing application program SPSS (Statistical Package Social Sciences) 25 version. The result of this research indicated that the profitability variable measured by return on equity had a negative effect on the financial distress, it meant that the company with high profitability level would reduce the financial distress. Moreover, the liquidity variable measured by the current ratio did not have any effect on the financial distress, it meant that current assets were used to pay off short-term liabilities, it took a long time to convert the inventory and accounts receivable into cash. Meanwhile, the leverage variable measured by debt to asset had a positive effect on the financial distress, which meant the higher the leverage value it caused the financial distress condition. In addition, the firm size variable measured by log total did not have any effect on financial distress, it meant that large companies require greater costs and supervision.
Keywords: profitability, liquidity, leverage, firm size, financial distress