The Effect of Free Cash Flow on the Efficiency of Investment Decisions in a Sample of Iraqi Companies Listed on the Iraqi Stock Exchange

The research aims to measure the impact of free cash flow on the efficiency of investment decisions, and this goal is achieved by identifying the concept of free cash flow and the concept of the efficiency of investment decisions, and identifying the impact of cash flow on the efficiency of investment decisions, by relying on annual financial reports data for a sample of Iraqi companies Listed in the Iraq Stock Exchange, which numbered (27) companies, represented by (15) companies from the banking sector, (8) companies from the industrial sector and (4) companies from the insurance sector for the period from (2011-2020).
For the purpose of measuring free cash flow, the model (Brigham & Houston, 2019) was used, and the model (Richardson, 2006) was used to measure the efficiency of investment decisions.
The research reached several results, the most important of which is that there is a statistically significant effect of free cash flow on the efficiency of investment decisions.
The most important thing recommended by the researcher is the need for companies listed in the Iraqi Stock Exchange to provide sufficient information about the free cash flow (FCF) and optional disclosure about it because this disclosure provides important information for all parties that have interests and objectives linked to the firm, and helps them in making investment decisions related to the firm as well. Study and analyze the financial data for making investment decisions in detail and follow the methods of evaluating investment projects (economic feasibility study) to prevent wrong (sub-optimal) investment decisions that result in huge irreversible losses.