Track: Modeling and Simulation

Abstract

This study aims to determine of financial flexibility and financial distress on consumer goods manufacturers in Indonesia. This research used quantitative research that took data from the company's audited financial statement and proceeded with Eviews 10. The population of this research is consumer goods manufacturers and used 8 samples that fulfilled certain criteria in 2017-2020 quarterly. This research used Random Effect Model. The results reveal the values of adjusted R-squared of independent variables is 87.3184%, and 86.4835% simultaneously affecting financial flexibility and financial distress. Return on asset is not significant in predicting financial flexibility and financial distress for selected samples. There are other four independent variables significantly influence financial flexibility and financial distress. The debt to equity ratio is the most influence variable on financial flexibility. The most influential variable on financial distress is market to book value. Investors and consumer goods companies might utilize the implications of this outcome to evaluate the company's success. Investors and consumer products makers might use the implication outcome to evaluate the company's performance.

Keywords

Financial Flexibility, Financial Distress, Profitability, Liquidity and Cash Holding.