FINANCIAL SECURITY MANAGEMENT IN FIRMS: AN APPLICATION IN TEXTILE SECTOR

Abstract

Firms with high managerial skills perform effectively and efficiently. Firms with successful financialsecurity management can continue their activities and take measures against various risks in themarket. The management of a firm is responsible for taking the necessary measures to strengthenits financial structure without compromising financial security. The aim of this study is to highlightthe significance of financial security management for firms to continue their activities successfully.The study is based on a model developed to determine firms’ financial security levels. The 5-year(2013-2017) financial statement data of 18 firms trading on the Borsa İstanbul (Stock Exchange inTurkey) were used. Multiple regression analysis was performed on the book value, current ratio,acid-test ratio, inventory turnover ratio, receivables turnover ratio, fixed asset turnover ratio, assetturnover ratio, debt ratio, interest coverage ratio, net profit ratio, gross profit margit, return onassets and return on equity calculated from the financial table data of the firms. The results showeda significant correlation between book value and current ratio, acid-test ratio, fixed asset turnoverratio, asset turnover ratio and gross profit margin. It is recommended that firms use their assetsefficiently and have optimum liquidity in order to ensure financial security.