The Effect of Financial Ratios on Stock Prices of BİST-Listed Football Clubs

Abstract

Manuscript type: Research paper
Research aims: When the financial statements of football clubs listed in
BIST are examined, it is seen that they are in financial distress. The clubs
continue their activities with negative equity. Their debts are five to six
times more than their assets and their continuity is uncertain. The striking
financial problems of football clubs have been the motivation of the study.
In this regard, the aim of this study is to determine the effect of financial
ratios on the stock prices of football clubs traded in Borsa Istanbul (BİST).
Design/Methodology/Approach: The stock prices and financial ratios of
the listed football clubs, of Türkiye, for quarterly 2005-2021 periods were
analysed using random effect analysis with the SAS 9.4 program. Data
were obtained from “Stockeys” provided by Finnet Elektronik Publishing
Ltd, and “isyatirim” website.
Research findings: As a result, the current ratio (CR) and debt to asset
(DA) ratio were found to have positive effects on stock prices.
Theoretical contribution/Originality: The originality of this study is
that it reveals the impact of financial analysis of football clubs, where
sports performance is a priority for investors. The study also provides a
critical perspective on the effects of financial ratios due to the remarkable
financial structure of football clubs. Another contribution of the study is
that it provides important information to both researchers and investors,
due to the extensive literature review. Future researchers can further
expand this research by using different financial ratios and considering
different ownership structures of clubs and socioeconomic structures of
board members.

Practitioner/Policy implication: The findings offer valuable insights
for investors, particularly those interested in the sports sector. The
identification of financial ratios that positively impact stock prices can
guide investment decisions.