The Effect of Cash Flow, Liquidity, and Leverage on Financial Distress in Health Sector Companies Listed on the Indonesia Stock Exchange for the Period 2021–2023

Abstract

This study aims to analyze the effect of cash flow, liquidity, and leverage on financial distress in pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange for the period 2021–2023. This study employs a quantitative method using a census technique, thereby including all 12 pharmaceutical sub-sector companies that meet the criteria as the sample. The research data consists of secondary data obtained from the audited annual reports of each company. The results indicate that, individually, cash flow, liquidity, and leverage do not have a significant impact on financial distress. However, when considered together, these three variables explain 38.8% of the variation in financial distress. This finding suggests the presence of other factors influencing company financial conditions, necessitating further in-depth research.