Indonesia Conference Directory

This study purposed to confirm the influence of financial ratios toward the possibility of financial distress in the listed manufacturing companies in the Indonesia Stock Exchange. Using a selected sample consist of 30 emitens with 90 units of analysis, the relationship between financial ratios and financial distress during the period of 2015-2017 was tested. The results revealed that the ratios of activity is not significantly affect the possibility of financial distress. Liquidity ratios significant negatively affect the possibility of financial distress. Furthermore debt ratios and earning ratios significant positively affect the possibility of financial distress. The research recommends that liquidity ratios and debt ratios are the best ratios that can be used to predict financial distress. The study also recommends that the earning ratios associated with liquidity ratios be provided in financial statements in order for users to make informed decisions in case of financial distress possibility