A Comparative Study of Financial Ratios of Automotive Industry: A Cross Country Analysis

Consequential percentage in economy of many countries are supported by value adding production systems of automobile companies. Automotive sector creates high rivalry among the countries. Strength of the sector in each country is determined by the total average achievement of all companies. Financial ratios are used to measure liquidity, efficiency, solvency and profitability of companies. In this study, return on equity ratio, return on asset ratio, profit margin ratio, gross profit ratio, EBIT ratio, EBITDA ratio, asset turnover ratio, stock turnover ratio, current ratio, liquidity ratio, solvency ratio, and gearing ratio have been used for analysis. Comparison among France, Germany, Italy, Japan, Korea, Spain and Turkey for period 2008 to 2016 has been covered by descriptive statistics, ANOVA test and representation of nine year trend. Results represents that; Italian automotive industry has extreme financial fluctuations. In contrast, France, Germany and Spain has common and more stable general trend. Far East countries; Japan and Korea, have independent ratio averages. Turkey has completely independent, increasing trend compare to industry averages of other countries. In addition, Turkey has highest profitability average according to descriptive statistic results. Keywords: Financial analysis, Automotive industry, Financial ratios.