The Effect of Financial Ratios on Firm Value: An Investigation in Istanbul Stock Exchange (Ise)

The financial ratios have been used as performance and activity information of firms for many years. the purpose of this study is to research whether there is a relation between the ratios used in financial statements’ analysis and firm value. with this aim, in this research the 7 years data of 56 manufacturing firms including the years 2004-2010 traded in ise, have been used. this research has been made constracting two different models. the relation between the variables was researched using panel data analysis. at the end of the analysis it has been identified that current ratio and cash ratio are effective on the dependent variable firm value but not any significant relation between inventory turnover, equity ratio, net profit margin, earnings per share and firm value.