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THE EFFECT OF FINANCIAL LEVERAGE, WORKING CAPITAL, PROFITABILITY, AND OPERATING CASH FLOW ON FINANCIAL DISTRESS IN THE PROPERTY AND REAL ESTATE SECTOR ON THE INDONESIA STOCK EXCHANGE FROM 2020 TO 2024

Abstract

This study aims to: (1) examine the effect of financial leverage on financial distress; (2) assess whether working capital influences financial distress; (3) evaluate the impact of profitability on financial distress; and (4) nalyze the effect of operating cash flow on financial distress. A quantitative method with a descriptive approach was employed. The population comprised 92 property and real estate firms listed on the Indonesia Stock Exchange (IDX) during 2020–2024. From this population, 27 companies were selected, yielding 135 observations. The data were analyzed using ordinal logistic regression in SPSS version 22. The findings indicate that: (1) financial leverage significantly affects financial distress; (2) working capital has no significant effect on financial distress; (3) profitability is negatively associated with financial distress; and (4) operating cash flow does not significantly affect financial distress.