Effects of financial decisions on financial sustainability: BIST applications

Sustainable growth rate provides the opportunity to show whether the firm can maximize its sales and income level without borrowing or needing an additional equity. The fact that the company does not have sufficient growth or has excessive growth poses a problem for the company. For this reason, the financial sustainability of the company and its sustainable growth rate are important. In the study, it is aimed to determine whether the financial decisions of the companies have an effect on sustainable growth and, if so, the direction and severity of the effect. In the study, the sustainable growth relations of companies traded in the BIST 100 Index and included in the BIST Sustainability Index are discussed using Higgins (1977), Internal Growth, Sustainable Growth models. In the study, the analyses were conducted by the panel data analysis method. In the study, the working capital of the company, which is important for sustainable growth, its capital structure, dividend policy, profitability rates, growth rates and stock market performance are discussed and its relationship with sustainable growth is examined. The periods between the years 2010-2022 were analyzed annually, with a total of 13 periods and 28 companies. A total of 11 financial ratios were used as financial decision variables. As a result of the study, the relationship between financial decisions and sustainable growth was determined by Higgins (1977) Sustainable Growth, Internal Growth, Sustainable Growth models. According to the results of the analysis, it has been determined that there is a significant relationship between financial decision variables and sustainable growth models in general. It has been concluded that the working capital ratio and the return on assets ratio have a significant and positive relationship with sustainable growth and the leverage ratio has no effect on the sustainable growth rate.