Analysis of the Effect Liquidity, Leverage, Profitability and Sales Growth on Financial Distress (Altman Z-Score) (Empirical Study of Retail Sub - Sector Companies Listed on the Indonesia Stock Exchange (IDX) 2015-2019
1Dewi Purwanti 2Dr. Ir. Andam Dewi Syarif , MM
1,2 Mercu Buana University, Jakarta, Indonesia
https://doi.org/10.47191/jefms/v5-i3-23ABSTRACT:
Financial distress is a condition when a company is experiencing financial difficulties, resulting in the company being unable to pay its obligations and leading to bankruptcy. This study was conducted to examine the liquidity ratio (Current Ratio), leverage (Debt to Equity Ratio), profitability (Return on Equity), and sales growth to financial distress (Altman Z-Score) in retail sub-sector companies listed on the Indonesia Stock Exchange (IDX) for the 2015-2019 period. The number of selected samples is 16 companies and has been determined using the purposive sampling method. The data collected is in the form of financial statements for the 2015-2019 periods. The analytical method used is the panel data regression method with the Common Effect model. The results of this study indicate that the current ratio, debt to equity ratio, sales growth have a positive effect on financial distress (Altman Z-Score), while return on equity does not affect financial distress (Altman Z-Score).
KEYWORDS:
Financial Distress (Altman Z-Score), Current Ratio, Debt to Equity Ratio, Return on Equity, Sales Growth
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