Changes in the financial characteristics of firms during the disinflation period: A study of manufacturing industry

Up to late 1970s for quite a long time, the presence of high and chronicle inflation stage in Turkey has negatively affected each aspect of the economy as well as the business sector. While inflation increases uncertainty fort he business sector, it also has a negative effect on costs and investments.With the ?Transition Program for a Strong Economy? which started in Turkey in 2001 and revised in the early 2002, the decrease going on in the inflation recently has led to a period of disinflation. Accordingly, the companies are to change their financial decisions with the transition from high inflation to low and permanent inflation stage.One of the most significant methods in determining the financial characteristics, the measuring of success and the efficiency and activity of a company is financial analysis. And financial ratios form the frame stones of the financial analysis. The purpose of this study is to find out - by using financial ratios - how the disinflation period going on in Turkey and the low inflation stage have an effect on the financial characteristics of the manufactured goods companies whose shares processed in Istanbul Stock Exchange. With this aim, two periods one of which is high inflation period and the other low inflation period have been determined and the data obtained has been commented by the use of Factor Analysis which is one of the multivariate statistical methods.According to the results of the investigation, while factors related to financial structure during the high inflation period concerning the financial characteristics of manufactured goods companies included in the study, it has been observed that profitability factors have been important during the low inflation period.Keywords: Inflation, Disinflation Process, Financial Ratios, Financial Characteristic, Factor Analysis.