AN EMPIRICAL EXAMINATION OF THE INFLUENCE OF MARKET PERFORMANCE INDICATORS ON PROFITABILITY

This study examines the impact of market performance indicators on the profitability of manufacturing firms listed on Borsa Istanbul (BİST). The financial data of 70 organizations operating continuously between 2014 and 2023 were studied for this purpose. The study evaluates the correlation between corporate profitability and the variables that measure market performance Return on assets (ROA) and return on equity (ROE) are used as dependent variables, while the price-to-earnings ratio, market capitalization-to-book value ratio, and earnings per share (EPS) serve as independent variables. The financial leverage ratio is incorporated into the model as a control variable. The study employed panel data analysis as its approach. The stationarity of the variables is assessed using the Fisher ADF test, whereas the Hausman test is employed for model selection. Fixed effects were deemed suitable for the ROA model, whereas random effects were used for the ROE model. Due to detected heteroskedasticity and autocorrelation, the Panel GLS method is applied. The results of the study show that earnings per share have a significant and positive impact on both profitability indicators. The effect of the market capitalisation/book value ratio on ROA is negligible; however, its effect on ROE is positive and somewhat significant. The results of the study suggest that market performance measures influence company profitability. The price-earnings ratio and the financial leverage ratio have a negative effect on profitability, while earnings per share have a positive effect.