This research is aimed to examine and analyze the empirical effect of earnings and cash flows in predicting corporate financial distress of the retail merchandizing enterprises. This study used secondary data obtained from the company’s financial statements in the period from 2014 to 2017 that are listed in IDX. Purposive sampling is used for collecting samples, and hence 15 firms were chosen for data research. The hypothesis testing was conducted using multiple discriminant analysis (MDA). The results of this study show that the earnings model is strong enough to predict corporate financial distress, while the cash flows model cannot be used as a predictive model of corporate financial distress. In other words, it is better to predict corporate financial distress based on earnings model than cash flows model.