A ailable online a www. ajou nals.in
In e na ional Jou nal o Managemen and Economics
In en ion
ISSN: 2395-7220
DOI: 10.47191/ijmei/ 11i10.03
Volume: 11 Issue: 10 Oc obe 2025
In e na ional
Open Access
Impac Fac o :
8.518 (SJIF)
Page no. 4721-4726
4721
Sina Ahmed Ja alla, IJMEI Volume 11 Issue 10 Oc obe 2025
The Role o Financial Analysis Tools in P epa ing Es ima ed Budge s (A Case
S udy in I aqi Indus ial Companies)
Sina Ahmed Ja alla
Al-I aqia Uni e si y
ARTICLE INFO
ABSTRACT
Published Online:
13 Oc obe 2025
Co esponding Au ho :
Sina Ahmed Ja alla
Financial analysis is a signi ican opic in decision-making, as i in ol es analyzing and
in e p e ing inancial s a emen con en o a ionalize decisions o s akeholde s who bene i
om i , and subsequen ly o p epa e budge s. All companies, ega dless o size o scope, p epa e
budge s; all manage s ake pa in his p ocess, and i a ec s all employees. The budge is
conside ed he annual inancial plan se by he Indus ial company, comp ising inancial da a
and de ailed esul s o each o ganiza ional elemen .
This esea ch s udies I aqi Indus ial companies o de e mine hei use o inancial analysis ools
in p epa ing es ima ed budge s ia ques ionnai e analysis, a i ing a se e al conclusions,
including ha es ima ed budge s a e i al o companies o assess inancial posi ions by using
pas yea s’ da a, which in u n cla i ies co po a e ac i i ies
KEYWORDS: Financial Analysis, Es ima ed Budge s, I aqi Indus ial Companies, Ques ionnai e Analysis, Financial Posi ions
INTRODUCTION
Es ima ed budge s a e plans and se e as quan i a i e
exp essions o he objec i es managemen seeks o achie e in
he sho and long e m. They may be de ined as a se o ools
managemen uses o planning, con ol, communica ion,
coo dina ion, mo i a ion, and pe o mance e alua ion.
Budge s a e a inancial ansla ion o a plan co e ing all
aspec s o a p ojec 's ac i i y o a u u e pe iod, in a
comp ehensi e and coo dina ed manne , app o ed by hose
esponsible and adop ed as a benchma k o acking ac ual
implemen a ion, empowe ing managemen o ake co ec i e
ac ion.
Financial analysis is a p ocess o de i ing quan i a i e and
quali a i e indica o s abou a company's ope a ions o p epa e
es ima ed budge s, elying on in o ma ion om inancial
s a emen s and o he sou ces o hen p epa e es ima ed
budge s o indus ial en e p ises.
CHAPTER ONE: RESEARCH METHODOLOGY
1.1 Resea ch Impo ance
The impo ance o his esea ch lies in enabling companies
o p epa e es ima ed budge s using inancial analysis ools.
Es ima ed budge s a e conside ed he inancial plan o he
upcoming yea h ough analyzing he p e ious yea ’s
his o ical da a o mo e accu a e es ima ions, minimizing he
gap be ween es ima es and ac uals, and cla i ying he ole o
inancial analysis ools in e alua ing pe o mance and u u e
decision-making.
1.2 Resea ch Objec i es
The objec i es o his esea ch a e o iden i y he ex en o
which I aqi Indus ial companies use inancial analysis ools
in p epa ing es ima ed budge s and o de e mine wha ypes
o inancial analysis con ibu e o ealis ic, well-s udied
es ima ed budge s ha a oid applica ion issues.
1.3 Resea ch P oblem
The esea ch p oblem is he ex en o which inancial
analysis ools a e used in p epa ing company es ima ed
budge s. Some company manage s ely on pe sonal judgmen
and es ima es wi hou scien i ic inancial analysis ools,
leading o signi ican di e ences be ween es ima ed and
ac ual budge s, causing majo de ia ions and a ec ing
implemen a ion.
1.4 Resea ch Hypo heses
1. I aqi Indus ial companies do no p io i ize
p epa ing planning budge s o con ol and
pe o mance e alua ion.
2. The e a e no obs acles o using planning budge s o
con ol and pe o mance e alua ion in I aqi
Indus ial companies.
“The Role o Financial Analysis Tools in P epa ing Es ima ed Budge s (A Case S udy in I aqi Indus ial Companies)”
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Sina Ahmed Ja alla, IJMEI Volume 11 Issue 10 Oc obe 2025
3. Su icien in o ma ion and an app op ia e
en i onmen a e no a ailable in I aqi Indus ial
companies o budge p epa a ion.
4. Sys em ou pu s a e no used o co ec ing
de ia ions and imp o ing p oduc ion e iciency in
I aqi Indus ial companies.
5. The ex en o which es ima ed budge s a e p epa ed
based on scien i ic p inciples o planning.
6. I aqi Indus ial companies do no p epa e planning
budge s acco ding o es ablished scien i ic s anda ds
o planning.
1.5 Key Te ms
• Financial Analysis: Analysis o inancial and
accoun ing da a by specialis s using a ios de i ed
om inancial s a emen s and o he epo s, usually
submi ed o uppe managemen as a basis o
decision-making.
• Financial S a emen Analysis: A key pa o
b oade business analysis, including isk assessmen
and he s udy o ac o s a ec ing he Indus ial
company.
• Financial Analysis Tools: Techniques and ools
used o analyze inancial da a, applied as app op ia e
o he company's si ua ion.
• Es ima ed Budge : One o he p ima y planning
ools o u u e business ac i i ies, summa izing
ope a ions and ac i i ies o be unde aken o e a
speci ic u u e pe iod ( ypically a yea ).
(Al-Nuaimi, 2002, p. 32)
1.6 P e ious S udies
(Summa y o ou p e ious esea ch s udies on budge ing and
inancial analysis in Jo dan, I aq, and elsewhe e.)
CHAPTER TWO: FINANCIAL ANALYSIS
2.1 Concep o Financial Analysis
Financial analysis encompasses ma hema ical, s a is ical,
and echnical me hods pe o med by a inancial analys o
assess company pe o mance in he pas , p esen , and u u e.
(Abu Bak , 2005, p. 55)
2.2 De ini ion o Financial Analysis
I is a sys ema ic p ocess o de i e indica o s abou a p ojec 's
economic ac i i ies using in o ma ion om inancial
s a emen s and o he sou ces, o pe o mance e alua ion and
decision-making.) Ge i,Niz a,2005,p133)
2.3 S akeholde s in Financial Analysis
1. In es o s: In e es ed in p o i abili y, liquidi y,
secu i y.
2. Lende s/C edi o s: Sho - e m ocus on liquidi y;
long- e m ocus on p o i abili y and sol ency.
3. Sha eholde s: Seek in o ma ion on company
p o i abili y and in es men sa e y.
4. Managemen and Owne s: Use analysis o
liquidi y, p o i abili y, e iciency, and co ec ing
nega i e de ia ions.
5. Go e nmen : Uses analysis o ax pu poses.
(Helles, 2006, p. 78)
2.4 Financial Analysis Tools
2.4.1 Ve ical (Common-Size) Analysis
Exp esses each i em as a pe cen age o a base, aiding
compa ison and end analysis.
2.4.2 Ho izon al (T end) Analysis
Iden i ies changes in inancial s a emen i ems o e ime,
exp essed as pe cen ages o absolu e alues.
2.4.3 Ra io Analysis
The mos impo an ool, used o measu e liquidi y,
e iciency, p o i abili y, and sol ency. (Al-Fadl, 2002, p. 372)
2.5 Types o Ra io Analysis
• Liquidi y Ra ios: Cu en , quick, wo king capi al.
• Sol ency Ra ios: Deb - o-equi y, deb - o-asse s,
in e es co e age.
• P o i abili y Ra ios: P o i ma gin, e u n on
asse s/equi y.
• E iciency/Ac i i y Ra ios: Tu no e , in en o y
u no e .
• Co e age Ra ios: Deb se ice co e age. )
Ga ison.,2006,p10)
• Ma ke Expec a ion Ra ios: Di idend yield,
ea nings pe sha e.
2.6 Objec i es o Financial Analysis
• E alua e ope a ional plans and p o i abili y.
• Assess e iciency and con ol sys ems.
• Iden i y he ue s a us o he en e p ise.
• Assess he company's abili y o mee inancial
obliga ions.
• Benchma k wi hin he sec o . .(Kaplan, 2007, p488)
CHAPTER THREE: ESTIMATED BUDGETS
3.1 De ini ion and Concep
The p ima y pu pose o a budge is o ansla e he company’s
o e all s a egy in o ac ions, ensu ing daily ac i i ies align
wi h s a egic goals. I is bo h a planning and con ol ool as
well as a means o communica ion, mo i a ion, and
pe o mance e alua ion. )Hammad, 2005, p. 87)
3.2 Budge Objec i es
• Planning: An icipa e and esol e p oblems be o e
hey occu .
• Con ol: Se cos s anda ds and moni o e iciency.
• Mo i a ion: In ol e employees o inc ease
commi men .
(Al-Fadl, 2002, p. 97)
• Communica ion and Coo dina ion: Con ey goals
and acili a e coope a ion.
“The Role o Financial Analysis Tools in P epa ing Es ima ed Budge s (A Case S udy in I aqi Indus ial Companies)”
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Sina Ahmed Ja alla, IJMEI Volume 11 Issue 10 Oc obe 2025
• Con ol: Iden i y de ia ions by compa ing ac ual
and planned ou comes.
• Pe o mance E alua ion: Benchma k s a and
depa men pe o mance o planned a ge s. (
56,2006 , Ga ison)
3.3 S eps o P epa ing Es ima ed Budge s
1. De ine he company's mission.
2. Se long- e m objec i es.
3. Se sho - e m objec i es and align wi h esou ces.
4. P epa e ope a ional p og ams and schedules o
each depa men .
5. Execu e he plan and p epa e epo s on ac ual
pe o mance.
6. Compa e ac ual wi h planned pe o mance, analyze
de ia ions, and ake co ec i e ac ion.
7. Adjus plans based on eedback o achie e company
goals. ) Ge i ,2005 ,133 p133)
CHAPTER FOUR: PRACTICAL APPLICATION
4.1 Cha ac e is ics o he S udy Sample
Da a analyzed by demog aphic cha ac e is ics such as
employee numbe , age,
Educa ion, expe ience, and job i le, as shown in he
ollowing ables.
Table 1: Dis ibu ion o Responden s by Educa ional Le el
Educa ional Le el
F equency
Pe cen age (%)
Bachelo 's Deg ee
20
50.0
Highe Diploma/Mas e 's/PhD
12
30.0
In e media e Diploma
8
20.0
To al
40
100.0
Table 2: Dis ibu ion o Responden s by Yea s o Expe ience
Yea s o Expe ience
F equency
Pe cen age (%)
Less han 5 yea s
6
15.0
5–10 yea s
12
30.0
Mo e han 10 yea s
22
55.0
To al
40
100.0
Table 3: Dis ibu ion o Responden s by Job Ti le
Job Ti le
F equency
Pe cen age (%)
Manage
14
35.0
Accoun an
17
42.5
Audi o /O he
9
22.5
To al
40
100.0
Su ey Scale
A i e-poin Like scale was used o de e mine he ela i e impo ance o each ques ionnai e i em:
Table 4: Like Scale
Deg ee o Ag eemen
Value
S ongly Ag ee
5
Ag ee
4
“The Role o Financial Analysis Tools in P epa ing Es ima ed Budge s (A Case S udy in I aqi Indus ial Companies)”
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Sina Ahmed Ja alla, IJMEI Volume 11 Issue 10 Oc obe 2025
Deg ee o Ag eemen
Value
Neu al
3
Disag ee
2
S ongly Disag ee
1
Da a Analysis and Resul s
Desc ip i e s a is ics we e used o ob ain means and s anda d de ia ions o su ey ques ions, as shown below.
Table 5: A en ion o I aqi Indus ial Companies o P epa ing Es ima ed Budge s
I em
Mean
S anda d De ia ion
Fu u e planning is impo an
4.20
0.82
Budge s a e p epa ed egula ly
3.60
0.95
Budge s a e used in inancial decision-making
3.45
1.02
Ac ual ou comes a e compa ed wi h budge s
3.30
0.75
De ia ions a e analyzed o imp o emen
3.00
0.95
The company igno es budge s
1.81
0.99
O e all
3.35
0.96
Table 6: A ailabili y o Su icien In o ma ion and En i onmen
I em
Mean
S anda d De ia ion
Su icien da a a ailable o p epa ing budge s
4.10
0.85
E ec i e coope a ion among depa men heads
4.95
0.64
Company sys ems suppo budge p epa a ion
4.15
0.87
O e all
4.04
0.96
Table 7: Obs acles o Using Planning Budge s as Con ol and E alua ion Tools
I em
Mean
S anda d De ia ion
No egula o y ba ie s
2.80
1.01
Su icien s a o budge p epa a ion
3.02
0.99
In e nal cons ain s exis
2.68
1.29
O e all
2.79
1.02
“The Role o Financial Analysis Tools in P epa ing Es ima ed Budge s (A Case S udy in I aqi Indus ial Companies)”
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Sina Ahmed Ja alla, IJMEI Volume 11 Issue 10 Oc obe 2025
Table 8: P epa a ion o Es ima ed Budge s Acco ding o Scien i ic P inciples
I em
Mean
S anda d De ia ion
Budge s p epa ed using scien i ic me hods
4.10
0.82
P e ious yea s' da a is analyzed
3.80
0.77
Budge s e lec company s a egy
3.53
0.74
O e all
3.81
0.79
Table 9: Summa y o Hypo hesis Tes ing Resul s
Hypo hesis / A ea
Mean
S anda d De ia ion
Resul
Gene al a en ion o budge p epa a ion
3.35
0.96
Posi i e
A ailabili y o in o ma ion and en i onmen
4.04
0.96
Posi i e
Obs acles o using budge s o e alua ion/con ol
2.79
1.02
Neu al/Some Issues
P epa a ion based on scien i ic p inciples
3.81
0.79
Posi i e
SUMMARY
The indings show ha he I aqi Indus ial companies in
he sample a e awa e and ha e posi i e a i udes owa d he
impo ance o es ima ed budge s in planning, con ol, and
pe o mance e alua ion. The companies use scien i ic
me hods in budge ing and, despi e some in e nal and ex e nal
obs acles, con inue o use budge s as e ec i e ools o
es ima ing e enues and educing cos s, cla i ying he
company's u u e.
CHAPTER FIVE: CONCLUSIONS AND
RECOMMENDATIONS
Conclusions
1. Mos I aqi Indus ial companies egula ly apply and
p epa e es ima ed budge s o decision-making and
inancial e iew.
2. Es ima ed budge s a e i al o educing cos s and
inc easing e enues h ough p oac i e planning.
3. Es ima ed budge s a e essen ial o assess inancial
posi ions using pas yea s’ da a, cla i ying company
ac i i ies.
4. Companies use budge ou pu s o add ess de ia ions
and imp o e u u e p ocesses.
Recommenda ions
1. Adop scien i ic me hodologies in budge
p epa a ion o p o ide a ounda ion o gene al
ules, sepa a ing ixed and a iable cos s, and
p epa ing s anda d es ima es.
2. In ol e all ele an depa men s in budge
p epa a ion.
3. Minimize in e nal obs acles aced in budge
p epa a ion.
4. De elop specialized s a o s udy inancial
posi ions and plan ealis ically based on p e ious
esea ch.
5. Upda e budge goals based on he company’s long-
e m s a egic plan.
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