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THE EFFECT OF FINANCIAL RATIOS ON THE FIRM VALUE: EVIDENCE FROM TURKEY

Süleyman Serdar Karaca and Arif Savsar

Journal of Applied Economic Sciences, 2012, vol. 7, issue 1(19)/ Spring 2012, 56-63

Abstract: This study examines the effect of financial ratios on firm value. For this purpose, the firms in the sectors of Food-Drink-Tobacco and Basic Metal Industry involved in ISE 100 index are examined. In the study, the relation between firm value and financial ratios are analyzed by panel data analysis. In the analysis 36 firms operating in these sectors between 2002 and 2009 have been analyzed. The dependent variable of the study is firm value; the independent variables are financial ratios. As a result, it has been found out by panel data analysis that financial ratios influence the firm value. There is a significant and positive relation between receivables turnover and firm value; there is a significant and negative relation between inventory turnover and return on equity. No significant relation has been detected between the other ratios.

Keywords: firm value; financial ratios; panel data analysis (search for similar items in EconPapers)
JEL-codes: G17 G32 H32 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ush:jaessh:v:7:y:2012:i:1(18)_spring2012:p:56

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