The Influence of Liquidity, Leverage, Company Size and Profitability on Financial Distress

Andi Runis; Dedy Samsul  Arifin; Arifuddin  Masud; Ummy  Kalsum

doi:10.47742/ijbssr.v2n6p2

Authors

Andi Runis STIE Enam Enam Kendari
Dedy Samsul Arifin High School of Economic Science of Enam Enam Kendari
Arifuddin Masud Halu Oleo University, Indonesian
Ummy Kalsum High School of Economic Science of Enam Enam Kendari, Indonesian

DOI:

https://doi.org/10.47742/ijbssr.v2n6p2

Keywords:

Financial Distress, Liquidity, Leverage, Company Size, Profitability

Abstract

This study aims to empirically examine the factors that influence Financial Distress in Property and Real Estate Companies. This study was tested with four independent variables, namely Liquidity (Current Ratio), Leverage (Debt Equity Ratio), Firm Size (ln of Total Assets), and Profitability (Return on Assets) using purposive sampling technique the authors chose seventeen companies as samples. This study uses panel data analysis obtained from financial reports and Annual Reports for 5 years. This study uses secondary data with the help of the Eviews 9 application. The results found that the Leverage Variable (Debt Equity Ratio) has a positive and significant influence on Financial Distress while Liquidity (Current Ratio), Company Size (ln of Total Assets), and Profitability Variables (Return). on Assets) has a negative and significant effect on Financial Distress.

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