Financial Analysis of the Venture Capital Investment Trusts Sector
Chapter from the book:
Kılıç,
Y.
&
Buğan,
M.
F.
&
Bayrakdaroğlu,
A.
(eds.)
2023.
Financial Analysis Applications in Borsa Istanbul: Sector-Based Reviews II.
Synopsis
Venture capital investment trusts (VCIT) make significant contributions to the growth of entrepreneurial ecosystems and the development of innovation-oriented businesses. They not only provide financing with their investments but also increase the chances of success of businesses through factors such as consulting, networking, and risk sharing. With this study, the financial analyses of the companies in the VCIT sector in Turkey were carried out and comments were made about both the sector in general and the companies in the sector. The financial analysis conducted reveals that the VCIT sector has significantly improved its financial health. These improvements show that the sector is in a stronger position compared to previous years. When the liquidity ratios are analyzed, it is seen that the solvency of the VCITs against their short-term debts has increased. This indicates that companies reduce their operational risks and provide a more reliable environment for investors and shareholders. In terms of profitability ratios, the VCIT sector grew by increasing returns on investments and increased operating profitability. This indicates that VCITs choose their investments in entrepreneurs more carefully and allocate more resources to successful projects. Moreover, the VCIT sector strengthened its financial stability by reducing both short-term and long-term liability ratios. This creates a less risky environment for investors and increases the credibility of VCITs. Although there is an improvement in turnover rates, the sector needs to increase these rates faster. This will increase the sector's capacity for future growth and provide more support to young entrepreneurs. On the other hand, although the sector has performed well in terms of change rates, the results of this financial ratio analysis, which are the most sensitive to the effects of inflation, should be carefully evaluated. As a result, VCITs have significantly increased their capacity to offer more opportunities to the entrepreneurial ecosystem through efforts to improve their financial health. These improvements enable them to more effectively fulfill their mission of supporting young and innovative businesses. By strengthening their financial health, VCITs can attract more capital and channel these resources to entrepreneurs, stimulating technological innovation and business growth.