The Impact of Quality of Profit on Improving Market Value: An Applied Study in a Sample of Iraqi Companies

Abstract

This study aims to analyze the impact of earnings quality on improving the market value of a sample of Iraqi companies listed on the stock market. The focus was on earnings quality as one of the basic indicators that reflect transparency and credibility in financial reports, and the extent of its impact on investors' decisions and thus the market value of companies. The earnings quality was calculated using working capital and cash flow indicators, and the market value was calculated using the Tobins model. The study relied on an applied approach by analyzing the quantitative financial data of a sample of Iraqi companies listed on the Iraq Stock Exchange, using a set of financial ratios and indicators. Multiple statistical models were also used to analyze the relationship between earnings quality and the market value of companies. The study concluded that there is a positive and significant impact of earnings quality on market value, as companies with high-quality earnings achieve higher levels of confidence among investors, which leads to increased demand for their shares and an increase in their market value.