Effect of financial crises on businesses: A sector analysis

xvn SUMMARY With the effect of globalization, the financial crises, that has gradually become more frequent dating from the second half of 1980's, not only affects the macroeconomic factors but also make major changes in the financial structure and decisions of non - financial business organizations. What encouraged the research on the "Effects of Financial Crisis on Business" is that financial management has turned to be uncertainty management in an aspect, because of financial crises in Turkey. The another reason is that in literature the effect and management of crisis are generally analysed from the view of organizational aspect, but deterioration of financial structure and financial recovery policies have been neglected. This research consists of five main parts. In the first part; titled "Financial Instability", economic stability theories, instability of the financial system, properties of financial crisis, the theories of financial crisis and the phases of crisis are discussed. In the second part; the reasons, phases and effects of financial crisises, especially on business organizations, emerged at the second half of 1980's in the world and in Turkey are analysed. In the third part, titled "The Effect of Financial Crisis on Business" the risk resources of business, corporate financial distress and the effects of financial crisis on the financial statements have been researched. In the fourth part titled "Crisis Management in Business" the management of working capital, fixed capital, debt and equity during financial crisis are analysed and alternative financial crisis management technics are discussed. In the last part; performances of firms which are listed in İstanbul Stock Exchange Market and manufacturing durable goods - machine and equipment during February 2001 Crisis are analysed. In the first section of this part, corporates' attitude consisting of their financial decisions against the crisis and to what extent they are effected is analysed by using comparative, vertical and ratio analysis of financial statements which have been released before and during crisis. In the last section of this part, crisis period performances of the firms in the sector, grouped according to criteria which are supposed to be important in a currency crisis, are analysed by applying nonparametric Wilcoxon and Mann - Whitney tests.