Pengaruh Current Ratio, Return on Asset, dan Total Asset Turnover terhadap Financial Distress di Bursa Efek Indonesia Tahun 2019-2023

Abstract

Financial distress remains a critical issue for capital-intensive industries, particularly the iron and steel subsector, which is highly exposed to economic cycles, high fixed costs, and asset rigidity. This study aims to examine the effect of liquidity, profitability, and asset efficiency—proxied by Current Ratio, Return on Assets, and Total Asset Turnover—on financial distress in iron and steel companies listed on the Bursa Efek Indonesia during the 2019–2023 period. The research adopts a quantitative explanatory approach using secondary data derived from audited annual financial statements. Financial distress is measured using a modified Altman Z-Score model, while data analysis is conducted through multiple linear regression after fulfilling classical assumption tests. The empirical results indicate that Return on Assets and Total Asset Turnover have a significant negative effect on financial distress, suggesting that higher profitability and more efficient asset utilization reduce the likelihood of financial difficulties. In contrast, the Current Ratio does not show a significant effect, implying that short-term liquidity is not a decisive factor in predicting distress within this capital-intensive subsector. These findings demonstrate that internal value-creation capacity, rather than short-term solvency, plays a dominant role in maintaining financial sustainability. The study concludes that financial distress prediction models should consider industry characteristics and prioritize profitability and operational efficiency indicators. The main contribution of this research lies in providing sector-specific empirical evidence that refines the understanding of financial distress determinants in heavy-asset industries and offers practical implications for managers, investors, and future academic research.