The Impact of the Change in the Elements of Cash Flows on the Capital Structure of Pharmaceutical Companies Listed on the Amman Stock Exchange in the Shade of the Covid-19 (Analytical Study)

Abstract

The aim of this study is to clarify the impact of the change in the elements of the cash flow statement on the capital structure. However, this study was conducted on six pharmaceutical companies listed on the Amman Stock Exchange during the period between 2018 and 2021. Meanwhile, the descriptive analysis of the study variables was used, besides each of the correlation tests, simple regression, and analysis of changes in financial ratios. Thus, for the purpose of showing the impact of cash flows elements on the capital structure of pharmaceutical companies and the extent to which it is affected by the Coronavirus (COVID-19) pandemic. Whereas, the current study concluded that there is a statistically significant impact (reject the null hypothesis) of cash flows on the capital structure as well as having an impact of cash flows on indebtedness and that there is no statistically significant impact (rejection of the null hypothesis) of cash flows on the shareholders’ contribution to property rights. One of the most important conclusions of the current study is that the change in cash flows negatively affects the indebtedness rate, and this is a good thing, as the increase in cash flows leads to a decrease in the indebtedness ratio and this is desirable by the companies’ management, owners and creditors, but the decrease in these flows leads to an increase in the indebtedness rate. Meanwhile, the current study recommended the possibility of studying the company’s ability to sustain in light of the high indebtedness’ circumstances and ways to survive from insolvency and bankruptcy.