A field study on the comparison of the manufacturing companies before and after the positive real interest policy was put into effect

Abstract

In this thesis, the financial structure and operating results of manufacturing companies before and after the positive real interest rate policy was put into effect are compared. This study was conducted by way of analyzing the financial structure and operating results of manufacturing companies from those two time periods. All required figures related with the operating results of these companies were obtained from Istanbul Chamber of Industry Periodicals dated October 1985 and 1984 and Financial Analysis book written by Cihangir Samin. By using these figures, firstly the financial ratios that are used in financial analysis were calculated, and then these ratios were compared with each other by using statistical analysis methods. The findings of this study showed that in the aspect of financial structure, the difference between the two groups of manuacturing companies from those two time periods was significant. The discriminant function, mentioned in section 2.2.1, explains approximately 20% of the discrimination, leaving 80% unexplained, which means that there might be other independent variables that would effect the discriminant function. According to findings, it came out that var 4-Return to Equity, var 2-Euqity/Total Asset and var 6-Return on Sales each can be accepted as a discri~inator betw~en the two groups of companies.According to coefficients of the above variables, it is understood that companies from Group Two use more equity than companies from Group One, thus they have higher Equity/Total Asset Ratio and smaller Return to Equity Ratio. Return on Sales Ratio is higher for Group One companies which means that since financial expenses became higher due to the increase in interest rates, Return on Sales Ratio has decreased. In the study, the following limitations were encountered. Under the facility of the given figures, only six ratios were calculated. The other ratios that would be used in the analysis are indicated in Appendix I. The shareholders' equity figures include revaluation adjustment which otherwise would have changed the results. The selected 90 companies for each year were not the same in the four years which othenvise might have changed ·the results. Additionally, in the selection of dependent variables, Group Two companies were selected from the years of 1983 and 1984 which otherwise would also have changed the results of the study. We hope that the results obtained from this study may contribute to the understanding of financial analysis of the manufacturing companies.