Evaluation of Factors Affecting the Financial Performance of Borsa İstanbul Cement Sector Companies

Abstract

Introduction: Turkish cement industry, which sustains growth trend between the years 2015 and 2018, is the biggest cement producer of Europe besides the growth success. Production trend in cement industry reversed after the decrease in the value of Turkish Lira and increased inflation in 2018. The data of this industry, which contributes to Turkish economy directly and indirectly, have become one of the leading indicators.

Aim: From this point of view, 17 cement industry firms which are traded in Borsa İstanbul equity market continuously are examined in terms of their Earnings Before Interest, Taxes, Depreciation, and Amortization, Cash Conversion Cycle (CCC), Export Rate Ratio and Gross Sales. These variables are analyzed between the period 2013:Q1 and 2019:Q2.

Method: Independent variables in the models are Industry Production Index (IPI), CBRT Dollar/TL selling rate of exchange, Tangible Asset Ratio, Growth Rate, Financial Leverage Ratio, Current Ratio, Market-to-Book Ratio (MB), Price-to-Earnings Ratio (PE), and Return on Equity (ROE).

Findings: According to panel regression results, Dollar/TL exchange rate is the unique independent variable that affects four dependent variables. While Dollar/TL exchange rate negatively affects Earnings Before Interest and Taxes and Gross Sales, it positively affects CCC and Export Rate. MB ratio positively affects CCC. In contrast, IPI, Tangible Asset Ratio, and Financial Leverage Ratio negatively affect CCC. Export ratio is negatively affected both by IPI and PE ratio. While MB ratio negatively affects Gross Sales ratio, IPI, Tangible Asset Ratio and Growth Rate positively affect it.

Citation

Abdioğlu, N. and Aytekin, S. (2021), "Evaluation of Factors Affecting the Financial Performance of Borsa İstanbul Cement Sector Companies", Özen, E., Grima, S. and Gonzi, R.D. (Ed.) New Challenges for Future Sustainability and Wellbeing (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 397-409. https://doi.org/10.1108/978-1-80043-968-920211021