The Effect of Company Profitability, Liquidity and Leverage on Financial Distress During the COVID-19 Pandemic

Liskayanti, Ni Luh Putu Wika and Ardina, Cening and Mandia, I Nyoman (2022) The Effect of Company Profitability, Liquidity and Leverage on Financial Distress During the COVID-19 Pandemic. Repositori Politeknik Negeri Bali.

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Abstract

The Covid-19 pandemic has affected the rapid national economic downturn. The decline in national economies is due to falling growth in various sectors, one of which is tourism because of social restrictions. The impact of the Covid-19 pandemic has had on the financial performance of the tourism sector especially on hotels in Bali. The Covid-19 pandemic causes many hotels to experience financial difficulties as a result of improved financial performance caused by hotel room occupancy that drop significantly, resulting in hotel closing. The study is to calculate and analyze the effects of corporate profitability, liquidity and leverage both partially and simultaneously on financial distress during the Covid-19 pandemic period 2019-2021 of the Le Grande Bali Hotel. The study is a quantitative study with the method of data analysis used that is the multiple linear regression analysis. The sample used in the study is a 3-year financial report, resulting in 36 data, with the research data being a secondary file of financial statements obtained from the Le Grande Bali Hotel. Dependent variable in the study is financial distress and independent variables in the study are profitability (Return on Assets Ratio), liquidity (Current Ratio), and leverage (Debt to Assets Ratios). The results of the study suggest that financial distress is partially impacted significant negatively by profitability and liquidity, while leverage has a significant positive effect on the financial distress. Simultaneously profitability, liquidity and leverage affect significant on financial dis-tress.

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