The Effects of Liquidity, Leverage, and Profitability on Financial Distress: A Case Study of Textile and Garment Companies Listed on the Indonesia Stock Exchange (2022–2024)
Irma Arung Padang, Catur Kumala Dewi, Muhammad Maulana
South Asian Journal of Social Studies and Economics · pp. 151–157 · Published 4 Jun 2025
10.9734/sajsse/2025/v22i61044Abstract
This study aims to determine and analyse the effect of liquidity, leverage, and profitability on financial distress in textile and garment companies listed on the Indonesia Stock Exchange for the period 2022-2024. The research sample used was 4 textile and garment companies. This study uses the analysis tools Current Ratio, Debt Equity Ratio, Return on Equity and the Altman Z-Score model. The results of the analysis using the Altman Z-Score model obtained a Z-Score. The data required are quarter 1 to 3 of 2022, 2023, 2024. The results of this study indicate that simultaneously liquidity, leverage, and profitability affect financial distress. Liquidity has no effect partially but any increase in leverage and profitability will increase the chance of financial distress.
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