Analyzing the Impact of Liquidity Policies on Companies' Financial Performance in Light of Current Economic Conditions in comericial banks

Abstract

The study aimed to examine the impact of current economic conditions, such as the Covid-19 pandemic, on the relationship between liquidity policies and companies’ financial performance. Providing a practical and theoretical framework for a better understanding of how liquidity policies affect financial performance and how to develop liquidity strategies in banks. The questionnaire was used as a data collection tool in this study to collect the opinions of the selected sample, who are university professors at the College of Management and Economics. The questionnaire was designed based on previous research to ensure it was consistent with the study objectives. A five-point Likert scale (strongly agree, agree, neutral, disagree, strongly disagree) was applied to improve and evaluate the questionnaire. Participants were presented with the research objectives and had sufficient time to answer all questions after they agreed to participate. 64 responses were collected and 58 questionnaires were analyzed after excluding 6 incomplete responses. Accordingly, a questionnaire was designed
consisting of 30 questions that are divided into two main axes: the first relates to analyzing the impact of liquidity policies in banks, and the second relates to the impact of these policies on the financial performance of companies under the current economic conditions. The study concluded that the mutual relationship between liquidity policies and financial performance shows that improving corporate performance can positively impact liquidity management decisions and thus enhance the provision of liquidity in the institution. Liquidity plays a crucial role in the stability of the financial system and its impact on the economy, so banks and companies can improve banking liquidity policies to enhance their financial performance. The study recommended that companies should provide the necessary liquidity for investment and growth, as this can contribute to improving their financial performance and enhancing their ability to achieve their goals. Companies should also realize that improving their financial performance can positively impact liquidity management decisions and enhance the organization's liquidity provision, making it more able to adapt to financial challenges.