The Influence of Financial Performance and Macroeconomic Factors on the Financial Distress of Textile and Garment Companies Listed on the Stock Exchange: Empirical Studies in Indonesia

Abstract

This study aims to determine the influence of financial performance factors and macroeconomic factors on financial distress in textile and garment companies in Indonesia. In this study, quantitative methods were used with causality research design. The study population is textile and garment companies listed on the Indonesia Stock Exchange in 2022. The research sample consisted of textile and garment sub-sector companies listed on the IDX for 5 consecutive years (2017-2021) and had audited financial statements. Companies that meet the sample criteria are 16 companies. Descriptive and inferential analyses are performed on the data. In inferential analysis, a panel data regression approach is used. The results showed that of the 9 research variables, there were 3 variables that had a significant influence on financial distress. Liquidity (CR) has a significant negative influence, Leverage (DAR) has a significant positive influence, and Activity (TATO) has a significant negative influence. Other variables such as profitability, sales growth, interest rates (BI 7day repo rate), exchange rates, world cotton prices (cotlook A index) and economic growth (GDP) do not affect financial distress.