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Journals / Anadolu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2025 / Volume: 26 Issue: 4

DO FINANCIAL RATIOS AFFECT FIRM VALUE? THE MADRID STOCK EXCHANGE EXAMPLE

Mehmet Akarçay(AHİ EVRAN ÜNİVERSİTESİ)0000-0003-1933-3510
Pages
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Publication Date
2025-12-29
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

However, according to the findings of the Granger causality test, causality relationships were identified between firm value and the independent variables in both one-way and two-way directions.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:The purpose of this study is to determine whether the financial ratios of companies traded on the Madrid Stock Exchange have an effect on firm value.
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Key Findings & Data:Within this scope, panel data regression analysis was performed using the annual financial data of 101 companies from 2015 to 2024, whose financial data was available in full, out of a total of 154 companies.
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Conclusion & Impact:However, according to the findings of the Granger causality test, causality relationships were identified between firm value and the independent variables in both one-way and two-way directions.
🔬Design:Modeling & Simulation
📍Scope:2015 Verileri
⚙️Variables:Corporate Finance · Financial Markets · Firm Value

Abstract

The purpose of this study is to determine whether the financial ratios of companies traded on the Madrid Stock Exchange have an effect on firm value. Within this scope, panel data regression analysis was performed using the annual financial data of 101 companies from 2015 to 2024, whose financial data was available in full, out of a total of 154 companies. In the study, the firm value variable was used as an independent variable in the analysis. First, a cross-sectional dependence test was performed on the time series data, followed by stationarity tests on the series. The Hausman test was used to decide whether to select the fixed effects or random effects model. After determining the suitability of the fixed effects model, the regression model was estimated for the series adjusted for autocorrelation and heteroskedasticity. According to the empirical findings of the study, a statistically positive and significant relationship was found between the leverage ratio and net sales variables and firm value. No statistically significant relationship was found between the variables of asset profitability, equity profitability, inventory turnover rate, asset turnover rate, current ratio, and liquidity ratio and firm value. However, according to the findings of the Granger causality test, causality relationships were identified between firm value and the independent variables in both one-way and two-way directions.

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Cite This Article

Akarçay, M. (2025). DO FINANCIAL RATIOS AFFECT FIRM VALUE? THE MADRID STOCK EXCHANGE EXAMPLE. Anadolu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Volume: 26 Issue: 4. https://doi.org/10.53443/anadoluibfd.1687501

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