Factors Affecting Profitability in Companies: An Application on BIST Corporate Governance Index

The main objective of this study is to analyze the basic determinants that affect firm profitability. For this purpose, the financial data of the companies traded on Borsa ？stanbul (BIST) markets and traced in the “Corporate Governance Index-XKURY” for the period of 2010-2015 have been used. Return on Assets and Return on Equity used as dependent variables while asset turnover rate, current ratio, liquidity ratio, cash ratio, turnover of receivables, inventory turnover, leverage ratio, size, growth, asset structure and tax shield used as the independent variables. The study made use of the stepwise multivariate regression models to evaluate the relationships between firm profitability and the other variables. The results indicate statistically significant and positive relationships between profitability and other independent variables namely, liquidity ratio, asset turnover rate, cash ratio and current ratio