The
purpose of
this study was to examine the effect of financial ratios to predict
financial distress on manufacturing company in the Indonesian Stock Exchange.
In this study the
financial ratios variable is proxied by
liquidity, profitability (NPM), financial leverage, and growth as
independent variables. While financial distress as measured by the Z-score as the dependent variable.

The
population
in this study were all the manufacturing companies that listed on the Indonesian stock exchange. Samples are taken of eighty-one manufacturing company
with purposive sampling method, and observation period during three years (2009-2011).

The results
showed that liquidity has a negative effect but
not significant to the financial distress. Profitability
(NPM) has a significant
and positive
effect on financial
distress,
while financial
leverage
and growth have unsignificant
but positive
effect on financial
distress.