ABSTRACTOne of the company’s objectives is to make a profit. Profit is one of the factors that influence a company’s ability to survive. In one of the efforts to achieve these goals, the company will always try to establish various strategies that are right for profit. However, the company at any time has the potential to face financial distress, and it may have an impact on many things if it does not take the right decisions to overcome this problem so that it may interfere with the company’s performance in obtaining profits. Therefore, this study focuses on analyzing the effect of financial distress on the profitability of companies listed on the Indonesia Stock Exchange. This study used secondary data from annual reports of the studied companies of the sample of 50 companies listed on the Indonesia Stock Exchange with a duration of 5 years, resulting in 250 observations. The dependent variable of profitability is determined by the return on assets (ROA), return on equity (ROE), net profit margin (NPM), and gross profit margin (GPM). Meanwhile, the independent variable of financial distress is determined by Altman Z-score modified. The research analysis uses the random effect model and fixed-effect model in the panel data regression process. The final results of this study indicate that financial distress has a positive and significant effect on ROA, ROE, and NPM by using the random effect model. Financial distress also has a positive and significant effect on GPM by using the fixed effect model. REFERENCESAgusti, C. (2013). Analisis factor yang mempengaruhi kemungkinan terjadinya financial distress. Semarang: Skripsi Sarjana Jurusan Akuntansi pada Fakultas Ekonomi dan Bisnis Universitas Diponegoro.Aktas, N., Eric, d. B., & Frederic Lobez, J.-C. S. (2012). The Information Content of Trade Credit. 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