The Moderating Role of Cash Liquidity in the Relationship between Operating Cash Flows and Earnings per Share: An Applied Study in the Iraqi Banking Sector

Abstract

 This research aims to study the relationship between operating cash flows and earnings per share, while examining the moderating role of cash liquidity in this relationship, based on a sample of Iraqi banks listed on the Iraq Stock Exchange during the period (2019–2023). The research adopts a quantitative approach using statistical models to analyze the relationship between variables, based on documented financial data.

The results showed a positive relationship between operating cash flows and earnings per share, reflecting the importance of operating activity in achieving profitability in the banking sector. The results also reveal a moderating effect of cash liquidity on this relationship, as it was found that high liquidity levels may limit the effectiveness of operating flows in improving profitability, indicating that unbalanced liquidity management may negatively affect the efficient use of operational resources.

The study recommends the need to enhance the efficiency of operating cash flow management and to avoid the maintenance of excessive liquidity levels without proper planning. It also urges bank administrations to take into account the balance between liquidity and profitability within the strategic plans of banks, in order to enhance their competitiveness and ensure the sustainability of their financial performance.