The effect of net cash flows in performance indicators
An applied study of a group of companies listed in the Iraq Stock Exchange
An introduction letter
To the Council of the College of Administration and Economics –
Karbala University, which is part of the requirements for obtaining a master’s degree in business administration science
BY
Eyad Tariq Dahir Al- Mamoory
Supervisor by
Assistant professor Doctor
Ali Ahmed Fares
Abstract
The current study aims to show the effect of net cash flow as an
independent variable in performance indicators as a dependent variable, and to clarify the role of the cash flow list in financial reports with a view to directing managers to use them instead of a statement of income that determines net profit only, as well as a statement of performance indicators derived from the income statement and financial position, And the extent of their contribution in evaluating the performance of Iraqi companies, and in a manner that gives a clear picture to both creditors
and investors about the ability of these companies to fulfill any financial obligation that they owe, and an indication of the amount of available liquidity and the profits accrued at the end of each year.
To achieve the goal of the study, a sample was chosen from three sectors represented by the industrial, agricultural and service sector companies listed on the Iraq Stock Exchange, which number (12) companies, divided as follows (6) industrial companies and (3) agricultural and (3) services for the period from 2005-2016. The independent variable, net cash flows,
was measured by three indicators, represented by operational and investment activities, and net total flows, after excluding financing activities, after they were practiced by companies for the study sample for many years, while the dependent variable was measured by performance indicators by liquidity indicators that included the circulation ratio, and the ratio Rapid, profitability indicators represented by the rate of return
on assets, return on equity, and indicators of leverage included, debt ratio and debt to equity ratio. To test the study hypotheses, the SPSS V.25 program was used, which included simple linear regression analysis.
The study yielded several conclusions, the most important of which was the absence of a significant effect of the net cash flows in the performance indicators of the sample companies. In light of the conclusions, a set of recommendations was reached, the most important of which is the need to give industrial, service and agricultural companies, the cash flow list
more attention, as well as to provide sufficient transparency when preparing them, and it is preferable to measure operational activities according to the direct method because they give more detailed information about the sources of cash and how use it in operational activities .Keyword: – Net cash flows, performance
