摘要：Profit quality usually affects the overall performance of companies. Although there is little empirical evidence on this issue, the literature indicates that the profit quality may lead to easier access to investors and creditors, which enhances the financial performance of companies. This paper tests whether the quality of profits will prevent companies from reaching the stage of failure, using a set of data from companies listed on the Iraq Stock Exchange. The research found that the quality of receivables, which is the amount of change in cash flows from operating activities, has a negative impact on the value of (Z), meaning that the value of (Z) decreases as a result of companies' weakness in achieving benefits from their operational activities. In addition, the continuity of profits hinders the financial success of companies leading to a decrease in the value of (Z) and that most companies in most periods suffer from failure to achieve profits or financial dues. There is no ability to predict the profits of companies, expected to cause a change in financial performance, and get rid of the low performance curve. The results confirmed that the researched Iraqi companies are either failing or on the way to failure, which needs a serious consideration to address the problems of the product provided by them, examining operational activities and working to improve cash flows that have a role in achieving financial success.
