THE RELATIONSHIP BETWEEN FINANCIAL FLEXIBILITY AND COMMON STOCK RETURN: APPLIED RESEARCH IN THE IRAQ STOCK EXCHANGE

Abstract

The research aims at an applied study in the nature of the relationship and impact of financial flexibility and returns on ordinary shares of some companies in the banking and industrial sector. The research dealt with the theoretical concepts related to both financial flexibility and ordinary stock returns, and financial measures were used in the applied aspect of financial flexibility represented (leverage ratios, liquidity ratio) on the basis of the sector, as well as returns on ordinary stocks represented (return on assets, return on equity), As the research community is represented by the Iraq Stock Exchange, the research community included (4) joint stock companies in the banking sector, and (4) joint stock companies in the industrial sector, for a period of 6 years (2015-2020), and the research was based on the hypothesis that “there is an effect Statistically significant for the measured financial flexibility (leverage ratios, liquidity ratio) in stock returns (return on assets, return on equity. Using the (spss 20) program, the hypothesis was tested using the multiple regression analysis tool, the results of the statistical analysis showed that there is a significant effect Statistical significance of the measured financial flexibility (total liabilities to total assets, liquidity ratios) in the return on equity, while there is no statistically significant effect of measured financial flexibility (total liabilities to equity) in the world. Return on the right of ownership. The results of the statistical analysis showed that there is a statistically significant effect of the measured financial flexibility (total liabilities to total assets, liquidity ratios) on the return on equity, while there is no statistically significant effect of measured financial flexibility (total liabilities to equity) on the return on equity. Property. The research came to the most important recommendations: the need for the sector (banking and industrial) to pay attention to the application of indicators (total liabilities to total assets, total liabilities to equity, liquidity ratio, return on assets ROA, return on equity ROE) to know the profits achieved by the research sample companies