The Effects of Profits and Cash Flow on Financial Distress Conditions: An Analysis of LQ45 Companies Listed on the IDX from 2020 to 2022

Abstract

The purpose of this research is to evaluate and analyse the effects of profit and cash flow on the financial distress conditions of LQ45 companies that are listed on the IDX between 2020 and 2022. The methodology employed in the research is quantitative. The LQ-45 Index Companies that are listed on the IDX for three years in a row between 2020 and 2022 make up the study’s population. Purposive sampling was the method utilised in the sampling process, yielding a sample of 30 samples from 10 different companies methods for analysing data that include hypothesis testing and multiple linear regression analysis. The findings of this research suggest that while the Cash Flow variable has a negative impact on Financial Distress conditions, the Profit and Cash Flow variables have a favourable impact on Financial Distress conditions. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2024.