The Influence of Profitability, RETA, Liquidity, Leverage, Firm Size, and Good Corporate Governance on Financial Distress

Nuraisya Arya Saputri1, Pramana Ridha Santoso2*

1Faculty of Economics and Business, YARSI University

2Faculty of Economics and Business, Brawijaya University

Abstract

This research aims to see how financial distress is affected by profitability, liquidity, leverage, retained earnings to total assets, company size, and good corporate governance. The population in this study are real estate companies listed on the Indonesia Stock Exchange between 2014-2018. This research relies on secondary data. The sample for this research which includes 17 firms, was selected using purposive sampling. Panel Data Analysis is used with the Eviews application to analyze data. According to research, leverage and profitability positively and significantly affect financial distress. The liquidity ratio to total assets has a positive but insignificant effect on financial distress. Meanwhile, company size and good corporate governance have a negative and insignificant effect on financial distress. At the same time (simultaneously), all variables have a significant influence on financial distress.

Keywords: Financial Distress, Profitability, Liquidity, Leverage, Retained Earning to Total Assets, CompanySize, Good Corporate Governance

How to cite:Saputri,N.A., Santoso, P. R., (2023). The Influence of Profitability, RETA, Liquidity, Leverage, Firm Size and Good Corporate Governance on Financial Distress, Research of Accounting and Governance (RAG) 1(1), 1-12.

Link: https://sanscientific.com/journal/index.php/rag/article/view/6