Firms invest intermittently, and a significant part of capital formation occurs during ``investment spikes''. Industry-level ``spike waves'', during which growth opportunities in an entire industry surge and a large fraction of firms in the industry generate investment spikes, also occur quite regularly. We define financial flexibility as the capacity to accommodate large shortfalls between a firm's investment needs and cash flows, as is the case when it has an investment spike. We develop an index for financial flexibility (FF) based on which firm-specific variables differentiate firms that generate investment spikes and those that do not during industry spike waves. In out-of-sample tests, our FF Index outperforms five popular financial constrained (FC) indices in predicting investment spikes, as well as regular investment and R&D investment. We use ChatGPT to evaluate the financial constraint status of a large sample of firms based on management statements in 10-Ks and generate new financial constraint measures; however, FF also outperforms these measures. The superior performance of our FF measure suggests that firms' actions are more revealing of their financial status and its determinants than what is disclosed in annual reports. We validate our empirical approach using data simulated in a model adapted from Gao, Whited, and Zhang (2021). As an application, we show that the FF Index predicts the capacity of firms to sustain investment during economic downturns, and again outperforms the FC Indices.