ANALYSIS OF FACTORS AFFECTING FINANCIAL DISTRESS IN PROPERTY AND REAL ESTATE COMPANIES LISTED ON INDONESIA STOCK EXCHANGE

Abstract

Abstract

This study aims to analyse the effect of profitability, liquidity, leverage, firm size and managerial ownership on financial distress in property and real estate companies listed on the Indonesia Stock Exchange (IDX) for the 2017-2021 period. The population in this study is 85 property and real estate companies listed on the IDX for the 2017-2021 period and the sample in this study is 80 based on a purposive sampling technique. The analytical method used in this study is logistic regression analysis. The results of the analysis in this study found that profitability as measured by Net Profit Margin (NPM) and liquidity as measured by Current Ratio (CR) have negative and significant effect on financial distress. Leverage as measured by the Debt to Equity Ratio (DER) and firm size as measured by total assets have positive and significant effect on financial distress. Managerial ownership has a negative and non-significant effect on financial distress.

Keywords: financial distress, net profit margin, current ratio, debt to equity, firm size, managerial ownership