Evaluation of Current Ratio and Return on Assets in Detecting Financial Distress: Evidence from Retail Companies in Indonesia

This study aims to analyze the effect of Current Ratio and Return on Assets (ROA) on financial distress in retail sub-sector companies listed on the Indonesia Stock Exchange (IDX) for the period 2020-2023. Financial distress is an unstable financial condition and can be an early indicator of bankruptcy. The financial distress prediction model used in this study is the Modified Altman Z-Score. This type of research is quantitative with multinomial logistic regression analysis method. The research sample consisted of 33 retail sub-sector companies selected through purposive sampling method. The data used is secondary data in the form of annual financial reports obtained from the official IDX website. The results showed that Current Ratio and Return on Assets (ROA) partially have a significant influence on financial distress. In addition, simultaneously Current Ratio and ROA have a significant effect on financial distress.