المرونة المالية ودورها في رفع مستوى الاداء المالي: دراسة تحليلية لعينة من المصارف المدرجة في سوق العراق للأوراق المالية للمدة (2016-2020)

Khanm  Noori Kaka Hama AL-Attar; Alaa  Ezat Jalal

doi:10.25098/7.2.7

Authors

Khanm Noori Kaka Hama AL-Attar Department of Marketing, College of Management and Economics, University of Sulaimani, Sulaimaniya, Iraq ,Department of Business Administration, College of Administrative and Financial Sciences, Cihan University - Sulaimaniya, Sulaimaniya, Iraq
Alaa Ezat Jalal Department of Business Administration, College of Management and Economics, University of Sulaimani, Sulaimaniya, Iraq

DOI:

https://doi.org/10.25098/7.2.7

Keywords:

financial flexibility, financial performance, Iraqi private banks, Iraq stock exchange

Abstract

The current research dealt with one of the important topics in the field of financial and banking sciences, which is financial flexibility and its role in raising the level of financial performance of banks, as financial flexibility helps banks to adapt to various sudden circumstances and situations that the financial institution may be exposed to, with the possibility of exploiting those shocks for the benefit of the institution, and the study aimed to measure the correlation and impact of financial flexibility variables on financial performance and its indicators.

Due to poor planning and management, obsolescence of banking services, turmoil in the environment, and stagnation of banking procedures, which resulted in a decline in the financial performance of banks, two main hypotheses were developed for test them, and the research population included the banks listed on the Iraq Stock Exchange (44) banks, while the sample included (30) banks for the period (2016-2020). The data were analyzed by a set of statistical tests using (SPSS V.26) and (Excel 2019) statistical software.

The most important finding is that financial flexibility and its variables have a significant correlation and impact on financial performance and its indicators, and those profitability indicators are unstable, specifically the rate of return on assets and the rate of return on equity (up and down) for most banks in the research. We also conclude that the failure of banks to achieve profits compared to the total assets they own as well as the total equity is a result of inflexibility and mismanagement of those assets, which led to the failure to achieve good performance.

The research also recommended a set of recommendations, perhaps the most important of which is the need for banking institutions (the research sample) to be interested in applying financial flexibility to raise financial performance indicators, especially profitability indicators, specifically the rate of return. On assets, and rate of return on equity as they are the most explanatory measurement of performance and how well banks are making profits.

References

التقارير و الوثائق الرسمية

- سوق العراق للاوراق المالية، التقارير المالية للمصارف عينة البحث للمدة (2016-2020).

المصادر الاجنبية:

Abdulnafea, A. L., Almasria, N. A., & Alawaqleh, Q. (2022). The effect of working capital management and credit management policy on jordanian banks’ financial performance. Banks and Bank Systems, 16(4), 229-239.

Al- Khero, I. M. M., Janudin, S. E. B., Abdelhakeem, A., & Ahmed, K. (2019). The Impact of Financial Engineering on the Financial Performance in Iraqi Banks. Global Journal of Accounting and Finance, 2, 33-46.

Azhar, I., & Meutia, T. (2022). The Effect of Return on Equity (ROE), Net Profit Margin (NPM), and Earnings per Share (EPS) on Stock Prices of Manufacturing Companies on the Indonesia Stock Exchange. In Proceeding International Seminar of Islamic Studies, 3(1), 479-488.

Botoe, C. W. (2012). The impact of liquidity on profitability of commercial banks in Liberia. (Master’s thesis, UNIVERSITY OF NAIROBI).

5-Brigham, E. F., & Houston, J. F. (2020). Fundamentals of financial management: Concise. 10th Ed. Cengage Learning.

Colline, F. (2022). The Mediating Effect of Debt Equity Ratio on The Effect of Current Ratio, Return on Equity and Total Asset Turnover on Price to Book Value. Jurnal Keuangan dan Perbankan, 26(1), 75-90.

Gizaw, S. (2016). financial performance analysis of Debre Birhan natural spring water Plc. (Master’s thesis, St. Mary's University).

Guo, Z., Hou, S., & Li, Q. (2020). Corporate social responsibility and firm value: the moderating effects of financial flexibility and R&D investment. Sustainability, 12(20), 1-17.

Hamilah, H. (2020). The Effect of Commissioners, Profitability, Leverage, and Size of the Company to Submission Timeliness of the Financial Statements Tax Avoidance as an Intervening Variable. Systematic Reviews in Pharmacy, 11(1), 349-357.

Kassa, T. (2013). Determinants of commercial banks performance in Ethiopia. (Master's thesis, St. Mary's University).

Kizildag, M. (2015). Financial leverage phenomenon in hospitality industry sub-sector portfolios. International Journal of Contemporary Hospitality Management, 27(8),1949-1978.

Lai, K., Prasad, A., Wong, G., & Yusoff, I. (2020). Corporate deleveraging and financial flexibility: A Chinese case-study. Pacific-Basin Finance Journal, 61, 1-9.

Lester, R., Rouen, E., & Williams, B. (2021). Financial Flexibility and Corporate Employment. published working paper.Available at SSRN 3829751.

Mahgoub, J. (2020). Factors Affecting the Financial Performance of US Children’s Hospitals: An Exploratory Study. (Doctoral dissertation, the Robinson College of Business Of Georgia State University).

Moritzen, M. R., & Schandlbauer, A. (2020). The impact of competition and time-to-finance on corporate cash holdings. Journal of Corporate Finance, 65, 1-60.

Oyedokun, G. E., & Saidu, B. (2018). Impact of intellectual capital on financial performance of listed Nigerian oil Marketing Companies. In Information and Knowledge Management, 8(9), 13-27.

Saunders, A., Cornett, M. M., & Erhemjamts, O. (2012). Financial markets and institutions. 5th Ed, McGraw-Hill/Irwin.

Snjawi, S, A, K., & Essa, S, K. (2021). The Role of Liquidity Indicators to Assess its Risks and Enhance Capital Adequacy in Banking Activity. Journal of Economics and Administrative Sciences, 27(130), 243-255.

Tran, Q. T. (2020). Corruption and corporate cash holdings: international evidence. Journal of Multinational Financial Management, 54, 1-15.

Ugo, C. C., & Egbuhuzor, C. A. (2022). Effect of Cash Flow Management on Financial Performance: Evidence from the pharmaceutical industry in Nigeria. African Journal of Accounting and Financial Research, 5(1), 1-13.

Zaineldeen, M. (2018). Liquidity and profitability analysis in the Palestinian banking sector. Journal of International Trade, Logistics and Law, 4(1), 44-53.

Zhang, J., Zhao, Z., & Jian, W. (2020). Do cash flow imbalances facilitate leverage adjustments of Chinese listed firms? Evidence from a dynamic panel threshold model. Economic Modelling, 89, 1-27.

Zhang, M., & Wen, J. (2017). Profitability analysis of KINGLONG nearly 5 years. In Journal of Physics: Conference Series. IOP Publishing,1-7.

Zhongming, A., Samuel, F., & Guoping, D. (2019). Impact of financial risk indicators on banks’ financial performance in Ghana. Business and Economic Research, 9(14), 23-52.