Abstract

This research was conducted with the aim of knowing and testing whether there is an
influence of financial performance (leverage, liquidity, profitability and sales growth)
and the mechanism of good corporate governance (managerial ownership, institutional
ownership, board of directors, independent board of commissioners and audit
committee) on financial distress on manufacturing companies listed on the IDX.
Based on the criteria set out in this study during the 2014-2017 period, 58 selected
manufacturing companies with 232 data were sampled in this study. This research
model was analyzed using logistic regression. The results of this study indicate that
leverage and independent board of commissioners have a positive effect on financial
distress. Profitability and managerial ownership have a negative effect on financial
distress. Liquidity, sales growth, institutional ownership, board of directors and audit
committee have no effect on financial distress.
Keywords: financial distress, financial performance, profitability, good corporate
governance.