Title:
INDUSTRY TYPE AS A CONTROL VARIABLE BETWEEN COMPANY SIZE, CAPITAL STRUCTURE, AND PROFITABILITY RATIO TO FINANCIAL DISTRESS

Authors:
M. Rosyid Ali Ridho, Dr. Endang Suhari, M.Si., Indonesia

Abstract:

Financial distress is a condition of a company experiencing financial difficulties. Therefore, companies need to ensure and maintain that financial conditions are always healthy so predictions are needed to see the current and future conditions of the company's financial health. This study aims to determine the effect of firm size, capital structure, and profitability ratios on financial distress with the control variable for the type of industry. This research was conducted on manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2017 – 2020. The sample used was purposive sampling and obtained 46 manufacturing companies. The analysis used is multiple linear regression and data processing using SPSS program. The results of the study are company size has a negative effect on financial distress (financial distress) of the company, capital structure has a negative effect on financial distress in manufacturing companies, profitability ratios have a positive effect on financial distress, and company size, capital structure, and profitability ratios. have a simultaneous effect on financial distress.