Unravelling Financial Distress: The Impact of Profitability, Leverage, Liquidity, Operating Capacity and Company Size

Abstract

Aims: To Establish effect of Profitability, Leverage, Liquidity, Operating Capacity, and Company Size of Transportation & Logistic Companies Listed in Indonesia Stock Exchange (IDX). Study Design: The population of this study consists of 37 transportation and logistics companies listed on the Indonesia Stock Exchange (IDX) for the period 2018-2022. Data from this study comes from the company’s annual report. Place and Duration of Study: Transportation firms that are listed from 2018 to 2022 on the Indonesia Stock Exchange (BEI) Methodology: In this research comes from the Company's annual report. The method used by the data is purposive sampling. For this investigation consisted of 22 companies where the sample of 63 businesses because it was unbalanced data for analysis used descriptive static analysis, logistic regression analysis, model feasibility test, and hypothesis test tested using the Eviews 13 analysis tool. Results: The results of the test analysis if the p-value is 0.03 < 0.05 with a positive coefficient value of 43.19423, then this shows that ROA has a significant positive effect on financial distress. The results of the test analysis if the p-value is 0.07 > 0.05, then this shows that DER has no effect on financial distress. The results of the test analysis if the p-value is 0.60 > 0.05, then this shows that CR has no effect on financial distress. The results of the test analysis if the p-value is 0.35 > 0.05, then this shows that TATO has no effect on financial distress. The results of the test analysis if the p-value is 0.04 < 0.05 with a negative coefficient value of -1.566118, then this shows that Company Size has a significant negative effect on financial distress. Conclusion: This quantitative study assesses the impact of profitability, leverage, liquidity, operating capacity, and company size on the financial distress of transportation and logistics companies using numerical data to test the hypothesis. Specifically, it evaluates the relationship between profitability, leverage, liquidity, operating capacity, and company size to financial distress.