The Leverage Degrees of Companies Traded in Istanbul Stock Exchange

Turgut Ozkan ()
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Turgut Ozkan: Halic University

Anadolu University Journal of Social Sciences, 2005, vol. 5, issue 1, 237-256

Abstract: The profitability of companies is related to the items of balance sheet and inco- me statement. The most important consideration for maximizing profit of companies is op- timization of these items composition. Undoubtedly, sales and financial costs constitute the most outstanding items in this composition. The historical performance of this two items which have a functional relationship to each other could be used to forming compa- nies’future profitability. In finance literature, the top of the tools using to measure com- panies performance is the leverage mechanism. Operational Leverage, Financial Levera- ge and Combined Leverage which is combined from Operational and Financial Leverage have an important function for measuring the financial potential of companies. In this ar- ticle, leverage degrees of trading companies at IMKB are calculated in details of firms, industries, and IMKB, and analysed in the basis of industries. As a result, we have tried to determine relationships among the leverage degrees, industrial tendencies and macro economic fluctuations, and finally we have tried to reach general conclusions.

Keywords: Finance Leverage; Operational Leverage; Ratio Analysis; Industrial Analysis. (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Date: 2005
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