THE EFFECT OF OPERATING CAPACITY, OPERATING CASH FLOW, AND SALES GROWTH ON FINANCIAL DISTRESS IN MANUFACTURING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE FOR THE PERIOD 2022–2024

Asy-Syura (Program Studi Ekonomi dan Bisnis Islam-Sekolah Tinggi Agama Islam Aceh Tamiang,SEKOLAH TINNGI AGAMA ISLAM ACEH TAMIANG)
Windi Anggriyani (UNIVERSITAS MALIKUSSLEH)
Mardiaton (Universitas Malikussaleh)
Cut Sri Firman Hastuti (Universitas Teuku Umar,Universitas Teuku Umar)
Dian Ariani (Universitas Teuku Umar)

Multidiciplinary Output Research for Actual and International Issue (Morfai Journal)
Vol. 6 No. 6 (2026): Multidiciplinary Output Research For Actual and International Issue

This study aims to analyze the effect of operating capacity, operating cash flow, and sales growth on financial distress, which is proxied by the interest coverage ratio (ICR), in manufacturing companies listed on the Indonesia Stock Exchange during the period 2022–2024. A quantitative approach was employed using secondary data obtained from corporate financial statements. The sampling technique applied was purposive sampling, resulting in 267 observational data points. Data analysis was conducted using panel data regression with the assistance of EViews 13 software. The findings reveal that operating capacity, operating cash flow, and sales growth have a positive and significant effect on the interest coverage ratio (ICR). These results indicate that higher operating capacity, operating cash flow, and sales growth lead to a higher interest coverage ratio, reflecting an improved ability of firms to meet interest payment obligations and thereby reducing the risk of financial distress.