PENGARUH LABA DAN ARUS KAS OPERASI UNTUK MEMPREDIKSI KONDISI FINANCIAL DISTRESS

Abstract

This research aimed to examine empirically the effect of profit and cash flow on financial distress. Return On Asset (ROA) measured the profitability; operational cash flow was measured by AKO ratio on debt total, and financial distress was measured by Interest Coverage Ratio (ICR). The research was quantitative. Moreover, the data collection technique used purposive sampling, in which the sample was based on the criteria given. In line whit that, ther were nine banking companies during five years of observation, 2016-2020, as the sample. The sample was listed on Indonesian Stock Exchange (IDX). Therefore, there were 45 samples of companies. Additionally, the data analysis technique used multiple linear regression with SPSS 26. The research result cocluded that profit positively and significantly affected the financial distress of banking companies listed on IDX. On the other hand, operational cash flow had a positive but insignificant effect on the financial distress of banking companies listed on IDX.