Cash Flow Volatility on Trade Credit with Size as Moderation
Rr. Alvita Aulia Nareswari, S.M. (a), Dr. Rahmat Setiawan, S.E., M.M., CFP. (b)

a) Faculty of Economics and Business, Universitas Airlangga
Jalan Airlangga No.4, Surabaya 60286, Indonesia
b) Faculty of Economics and Business, Universitas Airlangga
Jalan Airlangga No.4, Surabaya 60286, Indonesia

Abstract

This study aims to determine the effect of cash flow volatility on trade credit and whether firm size moderates the influence of cash flow volatility on trade credit. This study has a 129 sample with 589 observation manufacturing companies in Indonesia listed on the Indonesia Stock Exchange (IDX) in 2016-2020 period. The sampling method used purposive sampling and the analytical method used is Multiple Linear Regression Analysis and Moderated Regression Analysis (MRA). The results of this study indicate that cash flow volatility has a significant negative effect on trade credit and firm size significantly weakened the influence of cash flow volatility on trade credit. The control variables in this study, leverage doesn^t affect trade credit, sales growth have a positive effect on trade credit, and days sales in inventory have a negative effect on trade credit.

Keywords: Trade Credit- Cash Flow Volatility- Firm Size

Topic: Financial management