The Effect of Conservatism, Slack, Managerial Ability, and Uncertainty on Company Financial Performance

Eduard Ary Binsar Naibaho, Farah Margaretha Leon and Bahtiar Usman

Journal of Applied Finance & Banking, 2025, vol. 15, issue 1, 3

Abstract: This study aims to investigate the role of debt financing in the relationship between conservatism, slack, managerial capability, uncertainty, and corporate financial performance. To evaluate this effect, an exploratory study has been used on 382 samples of all sectors, except finance, listed on the ASEAN 5 for 21 years. Panel data regression with a fixed effect method is used to test the company's financial performance. The study results indicate that conservatism and available slack positively affect a company's financial performance. Conversely, recoverable slack and macroeconomic uncertainty negatively affect a company's financial performance. This paper contributes to the literature by advancing knowledge about accounting conservatism, organization slack, and company financial performance relationships over time, which have been scarcely studied. Â JEL classification numbers: M410, G300, G100,

Keywords: Accounting conservatism; Slack; Managerial ability; Uncertainty. (search for similar items in EconPapers)
Date: 2025
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