The impact of liquidity efficiency on the profitability - An applied study on the firms listed on the Palestine exchange

Abstract

This study examines the impact of cash flow efficiency on the profitability of firms listed on the Palestine Exchange. The study aims to determine the impact of the information extracted from the cash flow statement on financial performance, as well as raising attention to the decisions related to the efficiency of cash flow in a way that enhances the firms' profitability. The study analyzes the data of (22) industrial and service companies listed on the Palestine Stock Exchange (2015-2020) and relied on PANEL data through the Eviews12 statistical program. The study finds a vary in the impact of the liquidity efficiency information extracted from the cash flow statement on the profitability of non-financial firms. It finds a positive impact of return on equity from operating cash flows ratio on the return on equity. While the ratios of return on assets from operating cash flows and the net cash flows from operating activities to sales do not affect the firms profitability represented by return on equity.