Analysis of The Relationship Between Cash Flow Volatility with Capital Structure Decisions in Food and Beverage Companies in 5 Asean Countries

Abstract

This study aims to evaluate the impact of cash flow volatility on capital structure. This study uses a sample taken from Thomson Reuters for the period 2018 - 2022. This sample consists of companies from 5 countries in Southeast Asia, namely the Philippines, Vietnam, Thailand, Malaysia and Indonesia, in the food and beverage manufacturing subsector. The data used is a combination of cross-section data and time series data. The results showed that overall the cash flow volatility variable had a negative and significant impact on long-term debt while the short-term debt variable gave positive and significant results at the 1% level. In addition, this journal also analyzes cash flow volatility in companies that have different levels of cash flow. Based on previous research, the effect of cash flow volatility on capital structure decisions has not been examined in manufacturing companies, especially in Southeast Asian countries. Given the results, the academics should prove that the measurement of cash flow volatility will have an impact on the significance and direction of influence of a company's capital structure decisions. For managerial and food and beverage companies, can use the results of research as a role in determining the level of debt to be used in corporate funding.