Abstract

The research objective was to test the impact of accounting conservatism, interest coverage ratio, cash flow volatility, and business strategy on the bankruptcy risk of the non-financial sector in Saudi Arabia. Quantitative data were collected from 2016 to 2024 of the listed non-financial companies in the Saudi Arabia Stock Exchange. Dynamic panel data approach employing STATA-15 Software. The dynamic panel data results show that accounting conservatism and cash flow volatility have negative and significant impacts on bankruptcy risk. While the business strategy has a positive and significant impact on bankruptcy risk. On the other hand, the interest coverage ratio has an insignificant impact on the bankruptcy risk of non-financial companies in Saudi Arabia. The findings with these results contributed to the extant literature by highlighting the dual role of accounting conservatism and cash flow volatility in reducing bankruptcy risk, while emphasizing the counterproductive influence of certain aggressive business strategies on financial stability. The study for the practitioners emphasized the importance of adopting conservative accounting practices and managing cash flow effectively to mitigate bankruptcy risk while reevaluating business strategies to align with long-term financial sustainability. Limitations and future directions were also discussed at the end of the study.