Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)

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Financial Flexibility and Its Potential Contributing Factors

Authors
Yingxue Wang1, Linglin Jiang2, *
1Smeal College of Business, Pennsylvania State University, University Park, PA, United States
2International Business School, Xi’an Jiaotong-liverpool University, Suzhou, China
*Corresponding author. Email: ohkelly62@gmail.com
Corresponding Author
Linglin Jiang
Available Online 27 December 2022.
DOI
10.2991/978-94-6463-098-5_218How to use a DOI?
Keywords
Financial flexibility; Contributing factors; Industries
Abstract

To make a wise investment decision and take appropriate action during financial crises, it’s vital for all industries to have a general idea of the key factors which affect the financial flexibility of firms in different industries. In our study, factor analysis is firstly utilized to reduce dimension. Then, multilinear regression is conducive to studying the influential factors of financial flexibility in the chosen 6 sectors: basic materials, consumer cyclical, energy, industries, technology, and utilities. This method further demonstrates that (1) there is a positive relationship between external financing and financial flexibility, (2) a negative relationship between firms’ value and personal tax rate and financial flexibility respectively, and (3) no relationship between leverage and financial flexibility. We also use ANOVA to compare the impact of company size and industries, demonstrating that (1) Free Cash Flow per share, leverage ratio, and external financing, are not the same across categories of size, (2) payout ratio, PE ratio, and tax rate are the same among firms of different sizes, and (3) there is no relationship between the previous factors and industries.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
27 December 2022
ISBN
78-94-6463-098-5
ISSN
2352-5428
DOI
10.2991/978-94-6463-098-5_218How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yingxue Wang
AU  - Linglin Jiang
PY  - 2022
DA  - 2022/12/27
TI  - Financial Flexibility and Its Potential Contributing Factors
BT  - Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
PB  - Atlantis Press
SP  - 1935
EP  - 1944
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-098-5_218
DO  - 10.2991/978-94-6463-098-5_218
ID  - Wang2022
ER  -