TESTING THE EFFECT OF FINANCIAL RATIONS ON MARKET VALUE

Abstract

The main purpose of financial management is to maximize the wealth of the owners, in other words, the market value of the
firm. The market value of a firm is positively or negatively affected by many internal and external developments. The aim of
this study is to determine the internal variables that affect the market value of the firm positively or negatively in the companies
in Borsa İstanbul (BIST). The dependent variable of the study is the market value and the independent variables are used in
total 17 financial rations under the profitability, financial structure, liquidity, turnover rate and market indicators group. In the
research, 9 years data for 2010-2018 period of 25 companies in BIST Metal Goods, Machinery and Equipment Construction
sector were used. In this study, small scale, large scale companies are considered as a whole. According to the general results
obtained from the analyzes, the market value-book value ratio had a significant effect on the market value in all three companies
groups, while the significance of other financial ratios was observed to vary according to the groups.