Research Article
Moderating Role of Profitability in The Interaction of Liquidity, Leverage and Sales Growth on Financial Distress
@INPROCEEDINGS{10.4108/eai.4-11-2022.2328387, author={Salma Salma and Emma Suryani and Wawan Ichwanudin}, title={Moderating Role of Profitability in The Interaction of Liquidity, Leverage and Sales Growth on Financial Distress }, proceedings={Proceedings of the International Conference on Sustainability in Technological, Environmental, Law, Management, Social and Economic Matters, ICOSTELM 2022, 4-5 November 2022, Bandar Lampung, Indonesia}, publisher={EAI}, proceedings_a={ICOSTELM}, year={2023}, month={9}, keywords={financial distress liquidity leverage sales growth profitability}, doi={10.4108/eai.4-11-2022.2328387} }- Salma Salma
Emma Suryani
Wawan Ichwanudin
Year: 2023
Moderating Role of Profitability in The Interaction of Liquidity, Leverage and Sales Growth on Financial Distress
ICOSTELM
EAI
DOI: 10.4108/eai.4-11-2022.2328387
Abstract
This study aims to determine the effect of liquidity, leverage and sales growth on financial distress and the role of profitability as a moderator. The sample was selected using a purposive sampling technique, with a total sample of 11 coal sub-sector companies in the IDX period 2012-2021. The analytical method used is moderated regression analysis (MRA). The results of this study indicate that liquidity has a significant positive effect on financial distress, leverage has a significant negative effect on financial distress, And profitability can weaken the effect of liquidity and leverage on financial distress. The implications of this study further strengthen the agency theory, where the agent or company manager plays an essential role in managing liquidity and leverage and profitability in determining a company's financial distress level. Furthermore, it can also be used as a consideration for investors in analyzing and choosing to invest in the right company.