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The Relative Importance of the Financial Ratios Derived from Cash Flows Statement in Evaluating Liquidity and Earnings' Quality From the Viewpoint of Credit Analysts in Jordanian Commercial Banks and the Analysts of Paper Notes in Amman Stock Exchange

Prepared by Abed Alnaser Shehdy Alsayed Ahmad Supervised by Prof. Dr. Mohammed Matter

AbstractThis study aimed to present the role of financial ratios derived from Cash Flow Statement, and distinguishing between the accounting net profit and net cash flow; as well as identifying the opinions and points of view of both the credit supervisors in Jordanian commercial banks and the analysts of paper notes in Amman Stock Exchange about the relative importance of financial ratios derived from cash flow statement in evaluating firm's liquidity and earnings' quality, and the range of its impact on what financial decisions they take in their functional practices. In order to accomplish the study objectives, a questionnaire has been distributed t0 a sample of (95) individuals; (30) of them are credit analysts in Jordanian commercial banks and (65) of them are paper notes analysts in Amman stock

25

exchange. As well as, the mathematical averages and standard deviations have been used to identify the importance of the financial ratios derived from the cash flows statement, and the (One Sample T-test) to examine the first four hypotheses, and the (Independent Sample T-test) to examine the fifth and sixth hypotheses. The study reached a group of results, the most important are: Financial ratios derived from cash flows statement are considered important tools in evaluating the firm's liquidity from the view point of credit analysts and paper notes analysts. Financial ratios derived from cash flows are considered important tools in evaluating firm's earnings' quality from the viewpoint of credit analysts and paper notes analysts. There was a difference between the viewpoint of credit analysts and paper notes analysts about the relative importance of the percentages of cash flows statement in evaluating the liquidity on the artificial level, which is (5%) in this study. There was no difference between the viewpoints of credit analyst and papers notes analysts about the relative importance of the percentages of cash flows statement in evaluating the profits quality on the artificial level, which is (5%) in this study.

26

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