The Role of Return on Assets, Current Ratio, Company Size, Sales Growth, and Leverage as Determinant Factors of Financial Distress in Property and Real Estate Companies During the 2020–2024 Period

Rifqi Bagus Firmansyah; Suhita Whini Setyahuni; Linda Ayu Oktoriza; Pradana Jati Kusuma

doi:10.63922/ijebir.v5i04.3876

Rifqi Bagus Firmansyah Management Study Program, Dian Nuswantoro University
Suhita Whini Setyahuni Management Study Program, Dian Nuswantoro University
Linda Ayu Oktoriza Management Study Program, Dian Nuswantoro University
Pradana Jati Kusuma Management Study Program, Dian Nuswantoro University

DOI: https://doi.org/10.63922/ijebir.v5i04.3876

Keywords: Company Size, Financial Distress, Leverage, Return On Assets, Sales Growth

Abstract

This study aims to analyze the effect of Return on Assets (ROA), Current Ratio (CR), Company Size, Sales Growth, and Leverage on financial distress in property and real estate companies listed on the Indonesia Stock Exchange (IDX) for the 2020–2024 period. This quantitative study, with a causal-comparative design, used secondary panel data; The population analyzed consists of companies in the property and real estate sector, specifically 94 property and real estate companies listed on the Indonesia Stock Exchange and a purposive sample of 23 companies (fives years observations). Instruments include financial ratios and ZScore to measure financial distress; analysis techniques used panel data regression (OLS/CEM), descriptive statistics, model selection, classical assumption tests, t-tests, F-tests, and coefficients of determination using EViews 12. The results show that simultaneously all five variables have a significant effect on financial distress, while partially Company Size and Leverage have a negative and significant effect, while ROA, CR, and Sales Growth are insignificant. The findings indicate that larger company size and effective debt management reduce the risk of financial distress in this sector. The conclusion confirms these findings and recommends attention to capital structure and company scale; Limitations include sample size and Adjusted R-squared of 0.25, which indicates that other factors also play a role

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