Abstract
Predictions of financial distress has a central role for the company's going concern aspects. This research aims to empirically prove the role of profitability, leverage and liquidity in financial distress. The research population comprised all companies incorporated in the agricultural sector as well as basic industry and chemical sectors. The research sample obtained as many as 380 observations through the purposive sampling method. This study uses logistic regression analysis. This study provides evidence of significant role between profitability and liquidity on financial distress condition in the agricultural sector as well as the basic industry and chemical sectors. In the basic industry and chemical sectors, leverage has a significant role on financial distress condition.
Highlights
The uncertainty of economic conditions that have an impact on the survival of the company requires companies to make policies and manage their financial aspects well
The interpretation of the first hypothesis acceptance is that it is proven that profitability has a significant role on financial distress condition
The interpretation of the second hypothesis acceptance is that it is proven that leverage has a significant role on the financial distress condition
Summary
The uncertainty of economic conditions that have an impact on the survival of the company requires companies to make policies and manage their financial aspects well. This is necessary to minimize the company's potential to experience financial distress. Dance & Made (2019) and Veganzones & Severin (2020) defines financial distress as a form of failure where the company run into financial difficulties. One of the forms of the company's financial difficulties is represented by the delisting phenomenon. 287-307 of the causes of the delisted company was financial difficulties. This condition must be scrutinized by identifying early signs of financial distress
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