Using financial analysis ratios to evaluate the liquidity risks in industrial companies listed in the Iraq Stock Exchange

Abstract

Cash liquidity is of great importance in industrial companies due to its impact on the management of the company’s operational activities, as well as the use of its surplus cash in investment, which returns to the company investment profits that support its financial position in the market. Low liquidity leads to the company being exposed to financial risks that may affect its activities and weaken its position. Financial, and here the company's management must pay attention to analyzing liquidity to assess its risks, using financial analysis ratios to evaluate cash liquidity and indicate its effects on the company's financial position. The study aimed to evaluate the liquidity of industrial companies listed on the Iraq Stock Exchange, to determine the risks to which they are exposed, using financial ratios, which are (trading ratio, quick liquidity ratio, and working capital ratio). The study reached conclusions, the most important of which is that the analysis of liquidity ratios showed Companies that suffer from low liquidity and that may be exposed to risks. It also showed companies that have surplus liquidity and can be invested to achieve additional profits. The study also recommended the need to pay attention to analyzing cash liquidity in industrial companies to evaluate liquidity and find appropriate opportunities for investment when liquidity indicators are high, or Addressing its risks when its indicators are low.