Determinants of financial distress: analysis of financial ratio, market, and macroeconomic factors

Purpose: This research aims to examine the influence of Financial Ratios (Liquidity, Profitability, Assets Productivity, Solvability), Market Indicators (Market Capitalization, Market Volatility, Price, Leverage), and Macroeconomic Factors (Interest Rate, Inflation) on Financial Distress. Methodology/approach: A quantitative approach is employed with 180 observations from 45 publicly listed Indonesian mining companies (2020–2023), selected via purposive sampling. Logistic regression analysis was conducted using SPSS. Findings: The research findings reveal that financial ratios, including Liquidity, Profitability, and Asset Productivity, negatively impact Financial Distress, while Solvency shows no significant impact. Market indicators, such as Stock Prices, have a positive effect on Financial Distress, whereas Market Capitalization, Market Volatility, and Leverage do not show any significant effect. Additionally, macroeconomic factors like Interest Rates positively affect Financial Distress, while Inflation has a negative effect. Practical and Theoretical contribution/Originality: This research enriches the literature by providing recent evidence on Financial Distress determinants in the Indonesian mining sector. By integrating financial ratios, market indicators, and macroeconomic factors, it highlights key predictors relevant to emerging markets. Research Limitation: This research uses EPS as the sole indicator for Financial Distress classification and does not consider industry-specific differences, which may limit generalizability to sectors with distinct financial characteristics.