Financial Performance and Prediction of Financial Distress in Food and Beverage Companies Listed on the Indonesia Stock Exchange

Abstract

Bankruptcy risk is a risk that is avoided by all companies because it can have an impact on the liquidation of company. This study examines several factors that are thought to affect financial distress. Financial distress is measured by the Z-Score from Altman, while the factors that are thought to influence are liquidity as measured by the current ratio (CR), profitability as measured by net profit margin (NPM), leverage as measured by debt to total assets (DTA), and company growth is measured by sales growth. The population of this research are companies in the food and beverage sector on the Indonesia Stock Exchange as many as 32 companies with a sample of 27 companies using purposive sampling technique. Test the hypothesis using multiple regression analysis with a significance level of 0.05. The results show that liquidity and profitability have a significant effect on financial distress, while leverage and company growth have no effect on financial distress.