Assessing the Relationship Between Financial Ratios and Earnings Per Share (EPS): Evidence from Iraqi Listed Firms

الملخص

This study examines the impact of various financial ratios on the profitability of firms listed on the Iraqi Stock Exchange, with a particular focus on Earnings Per Share (EPS). Utilizing a sample of 76 firms over the period from 2009 to 2017, the study employs the Generalized Method of Moments (GMM) to analyze the relationships between EPS and key financial metrics, including Return on Assets (ROA), Book Value (BV), Ownership Ratio (OWR), Share Turnover Ratio (STR), and Trading Rate (TR). The results reveal that while lagged EPS and BV have a significant positive impact on current EPS, suggesting the importance of earnings persistence and asset value in driving profitability, ROA does not exhibit a statistically significant influence, indicating that asset efficiency may not be a primary driver of profitability in this context. Conversely, OWR, STR, and TR are found to have significant negative effects on EPS, highlighting the potential challenges associated with ownership concentration, liquidity, and trading activity. The findings suggest that firms in emerging markets like Iraq need to carefully manage their asset base, ownership structure, and liquidity to enhance profitability. The study provides valuable insights for investors, managers, and policymakers aiming to improve the financial performance of firms in volatile economic environments.