摘要：The food and beverage sub-sector is a manufacturing sub-sector with the largest contribution and growth rate in Indonesia. This industry is important for the national economy. However, the business actors in this industry face difficulties due to a weak macroeconomic condition. Hence, public companies in the food and beverage sub-sector are vulnerable to financial distress. The research objective was to analyze external and internal factors impact on financial distress of public companies in the food and beverage subsector. The financial distress model used the form of a recursive equation system to evaluate the food and beverage sub-sector. We observed five companies that experienced financial difficulties such as AISA, CEKA, INDF, PSDN, and STTP. The results showed that a good external factor as a proxy for financial distress was not able to increase the debt service coverage ratio. We recommended that companies efficiency on the cost of goods sold, reduce operating expenses, increasing assets, and reduce external funding as the primary countermeasure to face difficulties. We concluded that paying attention to external factors and the ability to pay debts were the key to protect the external factor impact.
关键词：debt service coverage ratio; faktor eksternal dan internal; financial distress; perusahaan makanan dan minuman; two stage least squares (2SLS)
