The Impact of Liquidity, Profitability, Leverage, and Cash Flow on Financial Distress in Wholesale Sector Companies Listed on The IDX from 2016-2019
DOI:
https://doi.org/10.22437/jca.v16i2.46737Keywords:
liquidity, profitability, leverage, cash flow and financial distressAbstract
This research aims to examine the effect of liquidity,
profitability, leverage and cash flow on financial distress in large
trading sub-sector companies listed on the Indonesia Stock
Exchange in 2016-2019. This research was conducted by
purposive sampling method. Data collection techniques using
secondary data. The financial distress variable is proxied using
the Altman Z-Scored formula. Data obtained from large trading
subsector companies listed on the Indonesia Stock Exchange
(IDX) from 2016-2019 using the Multiple Linear Regression
method using SPSS 23. The results of this study indicate that: (1)
liquidity has an effect on financial distress (2) profitability has an
effect on financial distress, high profitability indicates the
company is able to maximize its assets (3) leverage has no effect
on financial distress, even though the company has a lot of debt
to finance its operations (4) cash flow has no effect on financial
distress. This study contributes to the expanding corpus of
research on corporate financial distress. The results are
consistent with current financial theories that highlight the
importance of profitability and liquidity as critical markers of a
business's financial health. On the other hand, the lack of
discernible impact from cash flow and leverage. These findings
support further investigation into qualitative and contextual
elements
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