Pengaruh Rasio Profitabilitas, Leverage. dan Firm Size Terhadap Financial Distress Menggunakan Model Altman Z-Score (Studi Kasus Pada Perusahaan Sektor Manufaktur yang Terdaftar di Bursa Efek Indonesia periode 2017 - 2021)
Abstract
Financial instability is a situation where a company experiences a consistent decline in its financial health which ultimately leads to potential bankruptcy. It is critical for companies to identify and act on the early warning signs of financial distress. This study examines the effect of Profitability, Leverage, and Firm Size on Manufacturing Sector Financial Distress on the Indonesia Stock Exchange for the 2017-2021 period. The research study is based on selecting 200 samples from 40 companies in the manufacturing sector with a period range of 2017-2021 and selecting samples using purposive sampling techniques and predictive methods using logistic regression analysis in the IBM SPSS 25 application for data processing. The findings of the research study show that Profitability, Leverage, and Firm Size together have a significant effect on Financial Distress. Specifically, Profitability and Leverage show a partial effect on Financial Distress, while Firm Size does not show a significant effect. The results of the study concluded that the independent variable had a 69% influence on Financial Distress and the remaining 31% was caused by other factors. These findings emphasize the importance of companies monitoring the company's Return on Equity and Debt to Asset ratios to ensure that the company's debt level remains manageable and does not cause financial instability, while Firm Size does not show a significant effect.
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