Research Article
The Effect of Profitability and Leverage on Financial Distress in The Tourism and Recreation Sector Listed on Indonesia Stock Exchange (IDX) in 2018-2022
@INPROCEEDINGS{10.4108/eai.3-10-2024.2358764, author={Hanifah Hanifah and Elan Nurhadi Purwanto}, title={The Effect of Profitability and Leverage on Financial Distress in The Tourism and Recreation Sector Listed on Indonesia Stock Exchange (IDX) in 2018-2022}, proceedings={Proceedings of the 3rd International Conference on Contemporary Risk Studies, ICONIC-RS 2024, 3 October 2024, Surakarta, Indonesia}, publisher={EAI}, proceedings_a={ICONIC-RS}, year={2025}, month={9}, keywords={financial distress profitability leverage}, doi={10.4108/eai.3-10-2024.2358764} }- Hanifah Hanifah
Elan Nurhadi Purwanto
Year: 2025
The Effect of Profitability and Leverage on Financial Distress in The Tourism and Recreation Sector Listed on Indonesia Stock Exchange (IDX) in 2018-2022
ICONIC-RS
EAI
DOI: 10.4108/eai.3-10-2024.2358764
Abstract
The tourism and recreation industry sector is one of the top 5 largest foreign exchange earners for Indonesia. However, there was a contraction in economic value of this sector by 56% in 2020. This study aims to analyze and determine the effect of profitability and leverage on financial distress in tourism and recreation companies listed on the IDX in 2018-2022. The sample in this study was determined by the purposive sampling method, and the samples are 20 companies. The analysis methods used are descriptive analysis, multicollinearity test, heteroscedasticity test, logistic regression analysis, the omnibus test model of coefficients, McFadden's R Square, and ROC Curve. The results of this study found that there is a negative and significant effect of profitability on financial distress. Negative and no significant effect of leverage on financial distress. The simultaneous test shows a significant effect on financial distress. In this model, financial distress can be explained by 49.9% of independent variables. This shows profitability can be an appropriate predictor to indicate financial distress.
