The paper examines the influence of profitability on distance to default (DD) in Vietnam securities market. The investigated sampl e consists of 211 companies listed on HOSE during 18 years from 2010 to 2017. We apply KMV model to calculate distance to d efault and use both macroeconomics factors and firm specific factors as independent variables. Using General Least Squared (GL S) method, we find evidence to confirm the positive relationship between profitability and distance to default. This result showed t hat, although profitability did not directly reflect the cash flow generated, a good profitable enterprise would be an important facto r to help facilitate and generate cash flow and at the same time debt was guaranteed when it was due. Besides, the test results rev ealed that the financial structure and sales on assets have the inverse effect on the distance to default at the significance level o f 5%. The results also revealed that a group of macro factors had an influence on the distance to default of businesses, including spre ad, GDP and trade balance (via exchange rates). Gross domestic income had certain impacts on the distance to default of businesse s. This was also a basic indicator measuring the national economic cycle.

Along with production and business activities, debt is also a major concern of Vietnamese businesses. Debt can help businesses do business better, but it can also make businesses face difficulties in cash flow and liquidity. Meanwhile, the debt trading market in Vietnam is still primitive and underdeveloped. The article analyses the debt situation of businesses and the debt trading market in Vietnam from the perspective of business activities of Vietnam Debt and Asset Trading Coporation to gain an overview of the debt trading market and business debt trading activities to develop the business debt trading market in Vietnam.