THE ABILITY OF PROFITABILITY TO MODERATE THE EFFECT OF LIQUIDITY, LEVERAGE AND OPERATING CAPACITY ON FINANCIAL DISTRESS (EMPIRICAL STUDY ON RETAIL COMPANIES REGISTERED ON IDX 2012- 2017)

Abstract

This study aims to examine and analyze the ability of profitability in moderating the influence of liquidity, leverage, and operating capacity on financial distress. The sampling method uses purposive sampling. The sample of this study are 7 retail companies listed on the Indonesia Stock Exchange for the 2012-2017 period. The results showed that liquidity had a positive and significant effect, leverage had a negative and significant effect, operating capacity had a negative effect and was not significant on financial distress. Profitability can moderate the relationship of liquidity to financial distress. Whereas leverage and operating capacity for financial distress cannot be moderated by profitability.