Impact of Free Cash Flows on Financial Performance in Jordanian Commercial Banks: An Analytical Study

This research endeavors to ascertain the influence of free cash flows on the financial performance of commercial banks in Jordan. The study employs a descriptive-analytical methodology, wherein the investigators meticulously gathered data related to the independent variable—free cash flows and evaluated the associated changes in financial performance. This was accomplished by observing two key indicators—return on assets and return on equity. The data encompasses a fiscal period from 2015 to 2020, sourced from the annual financial reports published by thirteen prominent Jordanian commercial banks. The research produced several significant outcomes, the most crucial being the confirmation of the impact of free cash flows on financial performance, as determined by the indicators of return on assets and return on equity, within Jordanian commercial banks. In light of these findings, the study urges Jordanian commercial banks to examine the credit risks they face due to their consequential impact on both free cash flows and overall financial performance.