The Effect of Financial Ratio on Financial Distress (Empirical Study on Sub Industry of Hotels, Resorts and Cruise Lines Listed on The Indonesia Stock Exchange)

Abstract

Financial distress is a condition of a company starting to weaken where the company's performance continues to decline marked by a significant decrease in company profits in successive periods and if not addressed quickly, the company can go bankrupt. The occurrence of financial difficulties was triggered by various factors. Both internal and external factors of the company. Internal factors causing financial difficulties such as the company's lack of ability to work and maintain financial performance stability, resulting in the company being in a state of loss. The external factor causing financial difficulties is the weakening of people's economic income globally, such as the economic situation experienced during the COVID-19 pandemic crisis. This study aims to determine the effect of the liquidity ratio, profitability ratios, leverage ratios, activity ratios, and sales growth to financial distress, the title for this research is "The Effect of Financial Ratios on Financial Distress (Empirical Study on Hotels, Resorts and Cruise lines Sub-Industry Companies Listed on the Indonesia Stock Exchange). The type of research that will be used is associative quantitative research. Associative quantitative research, or research that investigates the relationship between two or more variables. The object of this research is the hotel, resorts and cruise lines sub-industry companies listed on the Indonesia Stock Exchange in 2019-2021. 16 companies that will be the research sample, with the sample technique used in this study is to use the purposive sampling method. Keywords: Liquidity, Profitability, Leverage, Activity, Sales Growth, Financial Distress.