September 5, 2025AKUA Jurnal Akuntansi dan Keuangan
The Effect of Profitability Towards Financial Distress
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Implication
This research explores how profitability influences financial distress in IDX-listed firms, suggesting critical management insights.
Key Points
- Profitability shows a positive effect on financial distress, indicating that higher profits can lead to lower financial problems.
- Analysis revealed that returns on assets and activity significantly affect financial distress, underpinned by empirical data from 322 observations.
- Using multiple linear regression analysis, this research identifies key relationships between profitability, leverage, and financial distress.
- The implications of these findings highlight the importance of profitability management to mitigate financial distress risks.
Cite This Study
Sitompul et al. (2025) studied this question.