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Journals / Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty / 2024 / Volume: 11 Issue: 4

On the Financial Determinants of the Piotroski F-Score: An Analysis of Borsa İstanbul Firms

Nida Abdioğlu(BANDIRMA ONYEDİ EYLÜL ÜNİVERSİTESİ, İKTİSADİ VE İDARİ BİLİMLER FAKÜLTESİ)0000-0002-8498-9893
Sinan Aytekin(BALIKESİR ÜNİVERSİTESİ, İKTİSADİ VE İDARİ BİLİMLER FAKÜLTESİ)0000-0003-1502-2643
Pages
—
Publication Date
2024-12-31
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AI Summary & Key Takeaways

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

Conversely, a negative relation between the Beneish M-score and Piotroski F-score implies that companies with a higher likelihood of earnings manipulation tend to have weaker financial health.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study investigates the factors effective on Piotroski F-score which is a proxy for financial health of the firms.
📊
Key Findings & Data:Manufacturing firms operate in Borsa İstanbul are considered in the analyses with using the time period of 2017:Q1-2024:Q3.
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Conclusion & Impact:Conversely, a negative relation between the Beneish M-score and Piotroski F-score implies that companies with a higher likelihood of earnings manipulation tend to have weaker financial health.
🔬Design:Modeling & Simulation
📍Scope:2017 Verileri
⚙️Variables:Piotroski F-score · Beneish M-Score · Altman Z-score Financial Health

Abstract

This study investigates the factors effective on Piotroski F-score which is a proxy for financial health of the firms. Manufacturing firms operate in Borsa İstanbul are considered in the analyses with using the time period of 2017:Q1-2024:Q3. This study contributes to the literature by identifying financial determinants of Piotroski F-Score in Türkiye. Driscoll and Kraay (1998) estimator is used with fixed effect panel regression in order to handle issues of heteroscedasticity, cross sectional dependency and autocorrelation in the model. Altman Z-score, return on invested capital, market to book ratio, Tobin’s Q ratio and Beneish M-score significantly impact Piotroski F-score. According to the regression results, companies with lower financial distress risks (higher Altman Z-score) are expected to have better financial health. Similarly, those with improved return on invested capital tend to exhibit stronger financial health. Moreover, firms with higher market-to-book ratios are generally more profitable, potentially leading to higher Piotroski F-scores, indicating better financial health. A higher Tobin’s Q value suggests greater performance expectations from the company, which correlates with higher financial health. Conversely, a negative relation between the Beneish M-score and Piotroski F-score implies that companies with a higher likelihood of earnings manipulation tend to have weaker financial health.

Özet

This study investigates the factors effective on Piotroski F-score which is a proxy for financial health of the firms. Manufacturing firms operate in Borsa İstanbul are considered in the analyses with using the time period of 2017:Q1-2024:Q3. This study contributes to the literature by identifying financial determinants of Piotroski F-Score in Türkiye. Driscoll and Kraay (1998) estimator is used with fixed effect panel regression in order to handle issues of heteroscedasticity, cross sectional dependency and autocorrelation in the model. Altman Z-score, return on invested capital, market to book ratio, Tobin’s Q ratio and Beneish M-score significantly impact Piotroski F-score. According to the regression results, companies with lower financial distress risks (higher Altman Z-score) are expected to have better financial health. Similarly, those with improved return on invested capital tend to exhibit stronger financial health. Moreover, firms with higher market-to-book ratios are generally more profitable, potentially leading to higher Piotroski F-scores, indicating better financial health. A higher Tobin’s Q value suggests greater performance expectations from the company, which correlates with higher financial health. Conversely, a negative relation between the Beneish M-score and Piotroski F-score implies that companies with a higher likelihood of earnings manipulation tend to have weaker financial health.

🔖

Cite This Article

Abdioğlu, N., Aytekin, S. (2024). On the Financial Determinants of the Piotroski F-Score: An Analysis of Borsa İstanbul Firms. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, Volume: 11 Issue: 4. https://doi.org/10.30798/makuiibf.1477251

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