Financial Ratios and Financial Distress: Evidence from Indonesian Industrial Subsectors

This study intends to examine how financial parameters, such as the current ratio, retained earnings to total assets, earnings before interest and tax to total assets, return on equity, debt to equity ratio, and net profit margin, affect financial distress. This study makes use of secondary data in the form of information taken from annual reports or financial statements of companies. This study employs a quantitative approach method with multiple linear regression analysis approaches utilizing SPSS software. The population of this study consists of businesses in the industrial subsector that are listed on the Indonesia Stock Exchange (IDX) for the years 2018 through 2021. Purposive sampling was used in the sampling procedure, which led to the collection of 168 data from 42 companies. The study's findings show that the current ratio, retained earnings to total assets, earnings before interest and tax to total assets, return on equity, and debt to equity ratio are statistically significant in influencing financial distress. In the meantime, financial distress is unaffected by net profit margi