The Effect of Sales Growth and Cash Flow Operating Activities on Financial Distress at PT Garuda Indonesia Tbk for the Period 2015–2024

Abstract

This study aims to examine and analyze the effect of sales growth and cash flow operating activities on financial distress at PT Garuda Indonesia Tbk for the period 2015–2024. This study uses a descriptive quantitative approach with secondary data sourced from the company's annual financial statements. The financial distress variable is measured using the Interest Coverage Ratio (ICR). Data analysis techniques include descriptive statistics, classical assumption tests, multiple linear regression, t-test (partial), F-test (simultaneous), and the coefficient of determination (R²) processed using the SPSS program. The results of the partial test (t-test) indicate that sales growth has a positive and significant effect on financial distress with a significance value of 0.028 (<0.05) and a regression coefficient of 9.126. Meanwhile, cash flow partially does not have a significant effect on financial distress with a significance value of 0.540 (>0.05) and a regression coefficient of 17.407. The results of the simultaneous test (F test) show a calculated F value of 4.715 with a significance of 0.050, which means that both variables together have a significant effect on Financial Distress. The coefficient of determination (R²) value of 0.574 indicates that Sales Growth and Cash Flow are able to explain 57.4% of the variation in Financial Distress, while the remaining 42.6% is influenced by other variables outside this research model.