Factors Affecting Profitability in Companies: An Application on BIST Corporate Governance Index

Tuncay Turan Turaboğlu () and Ersin Ti̇mur
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Tuncay Turan Turaboğlu: Mersin Üniversitesi, İ.İ.B.F., İşletme Bölümü, Mersin, TÜRKİYE

Bulletin of Economic Theory and Analysis, 2018, vol. 3, issue 2, 135-156

Abstract: The main objective of this study is to analyze the basic determinants that affect firm profitability. For this purpose, the financial data of the companies traded on Borsa İstanbul (BIST) markets and traced in the “Corporate Governance Index-XKURY” for the period of 2010-2015 have been used. Return on Assets and Return on Equity used as dependent variables while asset turnover rate, current ratio, liquidity ratio, cash ratio, turnover of receivables, inventory turnover, leverage ratio, size, growth, asset structure and tax shield used as the independent variables. The study made use of the stepwise multivariate regression models to evaluate the relationships between firm profitability and the other variables. The results indicate statistically significant and positive relationships between profitability and other independent variables namely, liquidity ratio, asset turnover rate, cash ratio and current ratio.

Keywords: Firm Profitability; Return of Equity (ROE); Return of Assets (ROA); BIST Corporate Governance Index (XKURY); Stepwise Multiple Regression Analysis (search for similar items in EconPapers)
JEL-codes: D24 G30 G32 (search for similar items in EconPapers)
Date: 2018
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