This study aimed to examine and to obtain empirical evidence about the
effect of financial ratio towards financial distress. Financial distress is the
financial difficulties that occur in a company prior to the bankruptcy and
liquidation. Financial distress was measured using a debt to equity ratio (DER).
Debt to equity ratio is a ratio that illustrates the company’s ability to meet its
obligations by using its own capital. The variables of financial ratio used in this
study were the profit margin, liquidity, profitability, financial leverage, sales
growth and operating capacity. The samples used in the study were the
manufacturing company of consumer goods industry sector listed in Indonesia
Stock Exchange in the period of 2012-2015. The samples were collected by using
purposive sampling method. There were 96 samples obtained research company
for 4 years. The data used were secondary data that were collected from the
Indonesia Stock Exchange. The data were analyzed by using logistic regression
analysis. The result shows the variable profit margin, liquidity, profitability,
financial leverage, sales growth and operating capacity have no effect on
financial distress.