PENGARUH PROFITABILITAS, LIKUIDITAS, LEVERAGE, DAN SIZE TERHADAP FINANCIAL DISTRESS PERUSAHAAN MANUFAKTUR

Abstract

This research aimed to examine the effect of profitability, liquidity, leverage, and size on financial distress. Profitability, liquidity, leverage, and size were the investors’ considerations in evaluating the level of companies’ financial distress. Financial distress was a condition where the company or individual could not fulfill financial obligations as did not have income or enough profit.The population was 32 Food and Beverage manufacturing companies that were listed on Indonesia Stock Exchange 2018-2020. Moreover, the data collection technique used purposive sampling, with 30 companies as the sample. From 2018- 2020, there were 90 observations. Additionally, the data analysis technique used logistic regression.Based on the result of the data analysis and hypothesis test, it concluded that profitability had a negative effect on financial distress. This meant, that the higher the profitability was, the lower the company had financial distress would be. Leverage had a positive effect on financial distress. It meant that the higher the leverage was, the higher the company’s liability would be. Therefore, the risk of failure in pay became higher. Size had a negative effect on financial distress. In general, the big company had better fundamental power than the small company. Meanwhile, liquidity did not affect financial distress.