ABSTRACT
This study was conducted to analyze the effect of liquidity ratios (LDR), profitability (ROA), and leverage (CAR) on the financial difficulties of banking companies listed on the Indonesia Stock Exchange (IDX) for the 2020-2021 period, moderated by credit risk during the COVID-19 pandemic. 19. Financial Distress was measured using the Altman Z-Score model, and compared with conditions before the 2016-2019 pandemic, so that the research data was taken from the annual report for the 2016-2021 period. The samples collected were 27 companies. This study uses quantitative analysis techniques with linear regression and processed using SPSS 22. The results of this study indicate that during the pandemic period and before COVID-19 in Indonesia, liquidity, profitability and leverage ratios have a significant effect on financial difficulties. Credit risk as a moderating variable can only strengthen the influence of the liquidity ratio and profitability ratio. Meanwhile, the leverage ratio cannot be moderated by credit risk. In the pre-pandemic period of 2016-2019, it showed that the ratio of liquidity, profitability, and leverage could not be moderated by credit risk. The findings in this study explain that banking conditions are not in financial difficulty during the pandemic, but profits for companies are low. This anomaly is caused by over-liquidity from credit that is not widely distributed to the business sector. © 2023, World Scientific and Engineering Academy and Society. All rights reserved.