Profitability moderate the effect of operating capacity and intellectual capital on financial distress

Abstract

Financial distress is the stage of declining financial conditions experienced by the company before the occurrence of bankruptcy or liquidity. This study aims to examine the effect of operating capacity and intellectual capital on financial distress with profitability as a moderating variable. The population in this study are property and real estate companies listed on the Indonesia Stock Exchange. The sample in this study amounted to 12 property and real estate companies during the 2016-2020 period. Sampling using purposive sampling method. The analytical tools used in this research are multiple linear analysis and Moderated Regression Analysis (MRA). Based on the results of the study, it shows that operating capacity has a positive effect on financial distress, intellectual capital has a negative effect on financial distress, profitability can moderate the effect of operating capacity on financial distress and profitability cannot moderate the influence of intellectual capital on financial distress.

The Effect of Financial Ratios on Financial Distress Conditions is Moderated by Profitability Ratios

“…The research results of Amah et al (2023), A. P. Sari & Sembiring (2022), Idawati & Wardhana (2021) and Bernardin & Indriani (2020) corroborate the results of this study which show that ROA is unable to moderate the effect of TATO on financial distress. However, there are differences in the research results of Winata & Budiasih (2022), Kadarningsih et al (2021) and Fretes (2021) which show that ROA is able to moderate the effect of TATO on financial distress.…”

“…Research Rodhiyah et al (2023) and Effendi & Hariyono (2022) support profitability being able to moderate growth on conditions of financial distress. Research Winata & Budiasih (2022), Kadarningsih et al (2021), andFretes (2021) informs that profitability can moderate activity on financial distress. H5: Profitability moderates liquidity on financial distress conditions.…”

“…Meanwhile, research Savitri & Rochdianingrum (2022), Hayati & Sholichah (2022), and Mulyatiningsih & Atiningsih (2021) informs that profitability is not able to moderate growth due to financial distress. Research Winata & Budiasih (2022), Kadarningsih et al (2021), and Fretes (2021) informs that profitability can moderate activity in financial distress. Meanwhile, research Amah et al (2023), A. P. Sari & Sembiring (2022), and Bernardin & Indriani (2020) informs that profitability is not able to moderate activity in a state of financial distress.…”