Surviving Financial Shocks: Cash Flow Volatility and Corporate Resilience in Indonesia

This study examines the effects of financial resilience and cash flow volatility on financial performance, measured by Return on Assets (ROA), among manufacturing companies listed on the Indonesia Stock Exchange during 2020–2024. Using a quantitative approach, the study analyzes 220 firm-year observations through multiple linear regression. The results show that financial resilience has a positive and significant effect on financial performance, while cash flow volatility has a negative and significant effect. Simultaneously, both variables significantly affect financial performance. These findings indicate that stronger financial resilience enables firms to maintain operational continuity and financial flexibility, whereas higher cash flow volatility increases liquidity uncertainty and constrains financial management. Consistent with Agency Theory, effective management of financial resources and cash flows can reduce managerial inefficiencies and agency conflicts, thereby supporting improved financial performance.

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Publication Details

Journal
BALANCE Jurnal Akuntansi dan Bisnis
Published
2026-11-01
DOI
https://doi.org/10.32502/4m6zgf79
Primary Topic
Working Capital and Financial Performance
Type
article
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Surviving Financial Shocks: Cash Flow Volatility and Corporate Resilience in Indonesia

Muhammad Prans Panca Renta, Tabah Rizki
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BALANCE Jurnal Akuntansi dan Bisnis
Working Capital and Financial Performance
article

Surviving Financial Shocks: Cash Flow Volatility and Corporate Resilience in Indonesia

Muhammad Prans Panca Renta, Tabah Rizki
article en

Abstract

This study examines the effects of financial resilience and cash flow volatility on financial performance, measured by Return on Assets (ROA), among manufacturing companies listed on the Indonesia Stock Exchange during 2020–2024. Using a quantitative approach, the study analyzes 220 firm-year observations through multiple linear regression. The results show that financial resilience has a positive and significant effect on financial performance, while cash flow volatility has a negative and significant effect. Simultaneously, both variables significantly affect financial performance. These findings indicate that stronger financial resilience enables firms to maintain operational continuity and financial flexibility, whereas higher cash flow volatility increases liquidity uncertainty and constrains financial management. Consistent with Agency Theory, effective management of financial resources and cash flows can reduce managerial inefficiencies and agency conflicts, thereby supporting improved financial performance.

BALANCE Jurnal Akuntansi dan BisnisVol. 11(2)
Sriwijaya University (ID)
Decent work and economic growth
Openalex Percentile: Top 4%
Working Capital and Financial Performance
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