Abstract

The study aims to reveal the impact of financial efficiency represented by a number of indicators, namely: (the ratio of operating banks and the turnover rate of assets) and financial independence represented by a number of indicators, namely: (the ratio of debt to assets and the ratio of permanent financing) in decreasing and reducing the level of financial fragility represented by the indicator (interest coverage) in Jordanian industrial companies. The research problem was identified in a number of questions about the extent of the impact of indicators of efficiency and financial independence in reducing the level of financial fragility in the Jordanian industrial companies, the study sample, where a number of hypotheses were formulated as solutions to the research problem, which were represented by impact hypotheses. Data were collected from the official website of the Jordan Stock Exchange and a sample of five Jordanian industrial companies for the period (2010-2020). Financial analysis and statistical methods were adopted in data processing using (Excel) and (Eviews-12) statistical program. A number of conclusions were reached, including the awareness of the industrial companies in the study sample to the risks of financial fragility and the need to confront it and try to maintain financial stability in companies and the need to reduce dependence on debt as a major source of financing. The results showed that with a decrease in the percentage of operating expenses, this leads to the effect of increasing the financial efficiency, which in turn leads to a decrease in the level of financial fragility. The results also showed that the low debt-to-assets ratio contributes to reducing the level of financial fragility. Also, companies’ reliance on modern financial systems, developing and training cadres and benefiting from global expertise has a significant impact on raising financial efficiency and reducing financial fragility in Jordanian industrial companies.