Financial Studies (Mar 2021)
FINANCIAL RATIOS AFFECTING SYSTEMATIC RISK IN JOINT-STOCK COMPANIES: BIST TECHNOLOGY (XUTEK) INDUSTRY COMPANIES CASE IN TURKEY
Abstract
Systematic risk cannot be controlled by business managers and cannot be eliminated by portfolio diversification. Factors related to the systematic risk may be interest rate, inflation, exchange rate, market risk, and politics. Systematic risk may also mean the magnitude of the correlation between stock price and market return. The measure of this risk is the beta coefficient. This study aimed to help the company managers, investors, and technology sector researchers to understand better systematic risk based on the technology companies operating in Borsa Istanbul. Understanding the risk structure of the technology industry is essential for the effective management of business activities. This study aims to examine firm-specific variables that are thought to be directly related to Beta. Findings obtained by panel data analysis from 14 technology companies traded in the BIST Technology (XUTEK) index for 2011: 1Q-2019: 4Q show that liquidity, debt leverage and current ratio are positively associated with risk. No effect of total assets, return on assets, asset turnover, and return on equity have been determined on systematic risk.
