Financial Determinants of Firm Profitability in Manufacturing Firms and An Application on BIST Manifacturing Firms

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Determination of the factors affecting the level of profitability of companies has a great importance in determinig of efficiency and effectiveness of economy. This study aims significance of the financial indicators in explaining the level of profitability of firms and to put forward the relationship between financial indicators and variables of profitability. It has been used 78 firms in Istanbul Stock Exchange (ISE) Manufacturing Sector and were considered financial ratios among 2000-2011 years in the analysis. In this study, it has been used panel regression analysis to measure the relationship between the variable sand were obtained 3 different models. In the models it has been used Earnings Per Share (HBK), Net Profit/Shareholder’s Equity (NK/OS), Net Profit/Total Assets (NK/TA) as dependent variables and Net Sales/Total Assets (NS/TA), Cost of Goods Sold / Inventory (SMM/STK), Net Sales / Accounts Receivable (NS/TİCA), Current Ratio (CO), Fixed Asset / Total Asset (DV/TA), Tangible Asset / Long Term Liabilities (MDV/UVYK), Net Sales / CurrentAsset (NS/DV) and Total Debt/Total Asset (TB/TA) as independent variables. As a result, while each 3 models analyzed explain statistically TB/TA, DV/TA, MDV/UVYK variables and NS/DV variable only explains statistically to Model 2 and Model 3.

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Firm , profitability , panel regression

Ege Academic Review (EAR)

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Ege Academic Review (EAR)