AL-Anbar University journal of Economic and Administration Sciences

The effect of solvency on profitability indicators / an applied study in Iraqi insurance companies

Document Type : بحث

Authors

Anbar University - College of Administration and Economics

Abstract

The aim of the research is to identify the impact of solvency on profitability indicators, as a number of indicators of the independent variable solvency were used of which (liquidity, net cash flow, debt and equity), and indicators of profitability of the dependent variable (return on assets ROA and return on equity ROE), and the application the research to (five) Iraqi joint-stock insurance companies that are listed in the Securities Commission for the period from 2012 - 2020, using a set of methods and programs, including the (excel) program for financial analysis and (panel data) for standard tests. After analyzing the research data and selecting its hypotheses, a set of results was reached most notably (there is an impact relationship of solvency in profitability indicators). The results of the standard analysis indicated that some hypotheses had a significant impact with profitability indicators and others had an effect, but it was not significant, as well as the insurance companies possessing sufficient solvency, and the ability to achieve profitability. Based on the results that were reached, a number of recommendations were made, most notably that insurance companies provide support and attention to indicators of solvency for its importance in strengthening the company’s financial position, as well as giving a safety indication to the creditors of the companies’ ability to fulfill their financial obligations, and keenness to maintain good liquidity ratios and work to increase them because of the importance of this in enhancing the company’s financial solvency and its ability to fulfill its short-term obligations, and this reflected positively in achieving profitability

Keywords

References
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Yenni, Y., Arifin, A., Gunawan, E., Pakpahan, L., & Siregar, H. (2021), The impact of solvency and working capital on profitability, Journal of industrial engineering & management research, 2(4), 15-38

AL-Anbar University journal of Economic and Administration Sciences
Volume 16, Issue 1 - Issue Serial Number 1
April 2024
Page 33-51
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