Financial Analysis of the Automotive Sector
Chapter from the book:
Kılıç,
Y.
&
Buğan,
M.
F.
&
Bayrakdaroğlu,
A.
(eds.)
2023.
Financial Analysis Applications in Borsa Istanbul: Sector-Based Reviews I.
Synopsis
In this study, it is aimed to examine the automotive sector, which has an important place in the Turkish economy, using financial analysis methods. In the study, financial statement data of 5 automotive companies, whose shares are traded in Borsa Istanbul, whose data can be accessed regularly in the 2018-2022 period, and which are among the leading companies of the sector, were used. Using the average financial statements of the automotive sector, the analysis findings of the companies were compared with the sector averages. Ratio analysis and trend analysis methods were used in the financial analysis of automotive sector companies.
As a result of the ratio analysis, it is seen that the automotive sector has a high liquidity structure, a high operating cycle, and a low cash conversion cycle. Analyzes show that short-term borrowings are the most important source of financing in the automotive sector. It has been determined that the profitability ratios in the automotive sector have increased continuously in the examined period. A similar increase was also observed in stock market performances. As a result of the trend analysis, it is possible to say that working capital financing policies have become more prudent and working capital investment policies have become more restrictive in the automotive sector companies as of the analyzed periods. On the other hand, it is seen that debt financing is preferred more widely than equity financing in the automotive sector and a significant part of debts consists of short-term borrowings. The results of the analysis show that despite negative events such as the Covid-19 pandemic, the problems experienced in the semi-conductor chips supply in the automotive sector, high inflation experienced in the Turkish economy and high volatility in exchange rates, the sales and profitability rates of the automotive sector companies have increased significantly due to the high demand in the sector and the need for motor vehicles.