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This study aims to examine the effects of profitability, capital structure, and sales growth on financial distress in state-owned construction subsector companies listed on the Indonesia Stock Exchange during the 2019–2024 period. Using purposive sampling, four sample companies were observed over six years, yielding 24 observations. This study adopts a quantitative associative approach, utilizing secondary data drawn from the companies' annual financial statements. Panel data regression analysis was conducted using the Common Effect Model (CEM) with the aid of EViews software. The results indicate that, partially, profitability measured by Return on Assets (ROA) has a positive and significant effect on financial distress, with a t-statistic of 4.453947 > t-table of 2.08596 and a significance value of 0.0002 < 0.05. Capital structure measured by the Debt to Equity Ratio (DER) has a negative and significant effect on financial distress, with a t-statistic of −2.503676 and a significance value of 0.0211 < 0.05. Sales growth has no significant effect on financial distress, with a t-statistic of 1.032783 < t-table of 2.08596 and a significance value of 0.3140 > 0.05. Simultaneously, the three variables have a significant effect on financial distress, with an F-statistic of 27.36258 > F-table of 3.098 and a significance value of 0.000000 < 0.05. The Adjusted R² of 77.47% indicates that these three variables explain 77.47% of the variation in financial distress, while the remaining 22.53% is influenced by factors outside the research model.
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Wicaksono et al. (2026) studied this question.
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