Measuring the factors affecting the liquidity of companies listed on the stock market (A comparative analytical study in some Iraqi and Jordanian industrial companies)

Abstract

The purpose of this study is to find the factors affecting the liquidity of companies listed in the Iraqi and Amman Stock Exchanges. It was applied to a sample of twenty companies consisting of (10) Iraqi industrial companies and (10) Jordanian industrial companies. Through testing and analysis, the study concluded that there is an inverse relationship between each of the company size, return on assets, and return on stock with the cash readiness index (Y2) by (-13.74), (-0.28), and (-3.94), respectively. As for the rest of the factors, they show a direct relationship with the cash readiness ratio, this is with regard to Iraqi companies. As for Jordanian companies, it was found that the liquidity ratio is negatively affected by working capital, debt ratio, return on equity rate, and earnings per share. It is also positively affected by the company size and return on assets. As for the cash readiness ratio (Y2), it is positively affected, i.e. directly related to working capital, company size, and return on assets. It is also affected by an inverse relationship with respect to each of the debt ratio, return on equity, and earnings per share.