The effect of changes in the financial ratios of companies on the performance of stock prices traded in the exchange market: Automotive sector

In this study, by examining the relationship between the financial ratios of the companies and the stock price, it is investigated whether the changes in the financial ratios of the companies affect the stock price or not. 12 financial ratios (current ratio, liquidity ratio, cash ratio, leverage ratio, Debt Turnover Rate, Maturity Structure of Liabilities, Net Profit Margin, ROE, ROA, Average Collection Period of Receivables, Average Sales Period of Stocks, Asset Turnover) were used as independent variables, and the stock price was used as the dependent variable. The study was carried out by using the panel data analysis method with the data of 7 automotive companies traded in BIST and 6 automotive companies traded in Germany, USA and Sweden stock markets for the period 2007Q1-2018Q4. In conclusion; for the automotive companies traded on the BIST the stock price is affected by liquidity ratios, financial structure ratios and activity ratios but there is no statistically significant relationship between stock price and profitability ratios; on the other hand, for the automotive companies that are traded on stock exchanges in other countries, it has been determined that the stock price is affected by liquidity ratios, financial structure ratios, activity ratios and profitability ratios.