On the Financial Determinants of the Piotroski F-Score: An Analysis of Borsa İstanbul Firms

Year 2024, Volume: 11 Issue: 4, 1457 - 1476, 31.12.2024

Nida Abdioğlu , Sinan Aytekin

https://doi.org/10.30798/makuiibf.1477251

Abstract

This study investigates the factors effective on Piotroski F-score which is a proxy for financial health of the firms. Manufacturing firms operate in Borsa İstanbul are considered in the analyses with using the time period of 2017:Q1-2024:Q3. This study contributes to the literature by identifying financial determinants of Piotroski F-Score in Türkiye. Driscoll and Kraay (1998) estimator is used with fixed effect panel regression in order to handle issues of heteroscedasticity, cross sectional dependency and autocorrelation in the model. Altman Z-score, return on invested capital, market to book ratio, Tobin’s Q ratio and Beneish M-score significantly impact Piotroski F-score. According to the regression results, companies with lower financial distress risks (higher Altman Z-score) are expected to have better financial health. Similarly, those with improved return on invested capital tend to exhibit stronger financial health. Moreover, firms with higher market-to-book ratios are generally more profitable, potentially leading to higher Piotroski F-scores, indicating better financial health. A higher Tobin’s Q value suggests greater performance expectations from the company, which correlates with higher financial health. Conversely, a negative relation between the Beneish M-score and Piotroski F-score implies that companies with a higher likelihood of earnings manipulation tend to have weaker financial health.

Keywords

Piotroski F-score, Beneish M-Score, Altman Z-score Financial Health, Financial Performance, Borsa İstanbul, Panel Data Analysis

Ethical Statement

The study does not necessitate Ethics Committee permission. The study has been crafted in adherence to the principles of research and publication ethics. The authors declare that there exists no financial conflict of interest involving any institution, organization, or individual(s) associated with the article. Furthermore, there are no conflicts of interest among the authors themselves. The authors declare that they all equally contributed to all processes of the research.

Project Number

-

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