Factors affecting firm performance: An application on manufacturing sector companies included in MSCI Turkey Index

The purpose of this study is to investigate the relationships between the factors influencing firm performance and the associated performance indicators. Firm performance is measured through indicators such as efficiency, profitability, growth, and market performance metrics, while the influencing factors are categorized into financial structure ratios, activity ratios, and liquidity ratios. The research focuses on firms listed in the MSCI Turkey Index, and both temporal and cross-sectional analyses were conducted using Panel Data Analysis. To select the most appropriate model, the Hausman test was applied, and based on the test results, the Fixed Effects Model was determined to be the optimal approach. The empirical findings reveal that the coefficients of the accounts receivable turnover, EBITDA margin, and cash ratio variables are statistically insignificant. Conversely, a positive relationship was identified between gross profit margin and return on equity (ROE). Additionally, a negative relationship was observed between the current ratio and ROE. Furthermore, the results show a positive relationship between earnings per share (EPS) and ROE, while leverage ratio, short-term debt, and liquidity ratio demonstrate negative and positive effects on ROE, respectively. In conclusion, this study contributes to the field by offering a detailed analysis of how various financial and operational factors impact different firm performance indicators, providing insights relevant to corporate financial management and decision-making processes. KEYWORDS: Firm Performance, Manufacturing Sector, Return on Equity, Return on Assets, Panel Data Analysis, Financial Ratios