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The Leverage Degrees of Companies Traded in Istanbul Stock Exchange

Author

Listed:
  • Turgut Ozkan

    (Halic University)

Abstract

The profitability of companies is related to the items of balance sheet and inco- me statement. The most important consideration for maximizing profit of companies is op- timization of these items composition. Undoubtedly, sales and financial costs constitute the most outstanding items in this composition. The historical performance of this two items which have a functional relationship to each other could be used to forming compa- nies’future profitability. In finance literature, the top of the tools using to measure com- panies performance is the leverage mechanism. Operational Leverage, Financial Levera- ge and Combined Leverage which is combined from Operational and Financial Leverage have an important function for measuring the financial potential of companies. In this ar- ticle, leverage degrees of trading companies at IMKB are calculated in details of firms, industries, and IMKB, and analysed in the basis of industries. As a result, we have tried to determine relationships among the leverage degrees, industrial tendencies and macro economic fluctuations, and finally we have tried to reach general conclusions.

Suggested Citation

  • Turgut Ozkan, 2005. "The Leverage Degrees of Companies Traded in Istanbul Stock Exchange," Anadolu University Journal of Social Sciences, Anadolu University, vol. 5(1), pages 237-256, June.
    • Handle: RePEc:and:journl:v:5:y:2005:i:1:p:237-256
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    File URL: http://www.anadolu.edu.tr/arastirma/hakemli_dergiler/sosyal_bilimler/pdf/2005-1/sos_bil.11.pdf
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    More about this item

    Keywords

    Finance Leverage; Operational Leverage; Ratio Analysis; Industrial Analysis.;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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