Firm life cycle and financial distress: working capital strategy as moderation

Puspita Sari; Iffah Zatil Ismah

doi:10.14414/tiar.v13i1.2992

Vol. 13 No. 1 (2023), Articles

Vol. 13 No. 1 (2023)

Firm life cycle and financial distress: working capital strategy as moderation

Articles

DOI: 10.14414/tiar.v13i1.2992

Published 2022-09-05

Puspita Sari⁺⁻
Iffah Zatil Ismah⁺⁻

Puspita Sari

Universitas Airlangga

http://orcid.org/0000-0002-6112-6163

Iffah Zatil Ismah

Universitas Airlangga

http://orcid.org/0000-0001-6312-8608

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Keywords

Financial distress
Firm life cycle
Working capital strategy

How to Cite

Sari, Puspita, and Iffah Zatil Ismah. “Firm Life Cycle and Financial Distress: Working Capital Strategy As Moderation”. The Indonesian Accounting Review, vol. 13, no. 1, Sept. 2022, pp. 21-34, https://doi.org/10.14414/tiar.v13i1.2992.

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Abstract

This study empirically examines the working capital strategy (WCF) as moderation on the probability of companies experiencing financial distress when viewed from the firm life cycle (FLC). This study uses logistic regression and moderated regression analysis (MRA) to analyze the data and SPSS 24 software to process the data. The study used the sample taken from non-financial sector companies listed on the Indonesia Stock Exchange (IDX) for the period of 2010-2020. The results indicate that the working capital strategy does not moderate the probability of companies experiencing financial distress when viewed from the firm life cycle (FLC). The probability of experiencing financial distress tends to be low in companies that are in the growth and mature phases. Thus, the results of this study confirm the firm life cycle theory.

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Firm life cycle and financial distress: working capital strategy as moderation

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