The Effect of Liquidity and Solvency Ratios on the Profitability of Commercial Banks Listed on the Amman Stock Exchange

It was the objective of this study to determine how liquidity and financial solvency affect commercial banks (CB) listed on the Amman Stock Exchange (ASE), by employing a descriptive analytical methodology, using a panel data method (Panel Data) and a multiple linear regression model (MULTI COLLINEARITY). There are two independent variables in the study: liquidity and solvency, and a dependent variable, profitability. A total of thirteen (CB) listed on the (ASE) are represented in the study population. In order to accomplish the study’s objective, the annual data on the variables affecting bank (PR) were analyzed for the period of (2016–2020), and the existence of a positive (SE) of indebtedness on (PR) variables: (ROA, ROE, REP). According to the study, Jordanian commercial banks (JCB) can achieve (PR) while maintaining a sufficient amount of liquidity by managing liquidity well. According to the study, commercial banks should also be able to direct their investments, exploit surplus funds, and employ them so that they can achieve returns while retaining funds to meet their obligations, and achieve a balance between sources of funds and uses of funds so that short-term investments become short-term financing sources.