Cash flow pattern for predicting bankruptcy

Raka Shidqul Musyaffa, Dony Abdul Chalid

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


This study aims to analyze whether cash flow patterns can be a predictor of bankruptcy. We conducted panel data analysis on Indonesian companies that had undergone forced delisting from the Indonesia Stock Exchange (IDX) during the period 2007-2017. We found that there are different cash flow patterns between financially healthy companies and financially distressed companies. The cash flow patterns derived from positive and negative signs of cash flow components which consist of financing, investing and operating activities. Some patterns of cash flow can be predictors of financial distress. The results found that companies are more likely to experience financial distress situation when the company generates negative cash inflow from daily operation activities, although they can generate cash from financing and investing activities.

Original languageEnglish
Title of host publicationBusiness and Management Issues in the Global and Digital Era
Subtitle of host publicationIndonesian Perspectives
PublisherNova Science Publishers, Inc.
Number of pages18
ISBN (Electronic)9781536165302
ISBN (Print)9781536162752
Publication statusPublished - 11 Nov 2019


  • Bankruptcy
  • Cash flow patterns
  • Financial distress


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