DETERMINANT OF FINANCIAL DISTRESS: THE CASE OF PULP & PAPER COMPANIES REGISTERED IN INDONESIA STOCK EXCHANGE

Augustina Kurniasih (Mercu Buana University)
Heliantono (Mercu Buana University)
Agus Herta Sumarto (Mercu Buana University)
Rianti Setyawasih (Islamic University 45 Bekasi)
Isti Pujihastuti (Islamic University 45 Bekasi)

Jurnal Manajemen dan Agribisnis
Vol. 17 No. 3 (2020): JMA Vol. 17 No. 3, November 2020

The pulp and paper industry contributes to the Indonesian economy, especially to the non-oil and gas processing industry. Empirical research shows that pulp and paper companies listed on the Indonesia Stock Exchange (IDX) indicated financial distress. This study aims to find the effect of liquidity, leverage, profitability, and efficiency on pulp & paper companies' financial distress listed on the IDX. Using the Altman Z-score as a measure of financial distress, it was found that profitability, efficiency, and liquidity had a significant adverse effect on financial distress. In contrast, leverage had a significant positive effect on financial distress. Profitability has the greatest influence on financial distress, so it needs the primary intention of management. Keywords: financial distress, liquidity, profitability, leverage, efficiency