Financial Ratios and Financial Distress on Manufacturing Companies in Indonesia

Abstract

Financial distress is a condition where a company experiences financial difficulties and caused company into bankruptcy. The purpose of this research is to investigate the impact of liquidity, profitability, and total assets turnover on the level of financial distress experienced by manufacturing companies that are listed on Indonesia Stock Exchange during 2019-2022. This study using purposive sampling based on particular criteria, thus sample of 617 data were acquired which obtained from 165 companies. The analysis technique in this research uses logistic regression analysis. This research indicates that liquidity, profitability, and total assets turnover have a strong negative effect on financial distress.