Categorization of Companies Listed in the BIST National 100 Index Based on Financial Structure Ratios: A Cluster Analysis with Categorical Variables

Tüzüntürk S.

Aizanoi Finance Review, no.3, pp.1-11, 2024 (Peer-Reviewed Journal)

  • Publication Type: Article / Article
  • Publication Date: 2024
  • Journal Name: Aizanoi Finance Review
  • Journal Indexes: Index Copernicus
  • Page Numbers: pp.1-11
  • Bursa Uludag University Affiliated: Yes

Abstract

This study aimed to categorize companies in the Borsa Istanbul National 100 Index based on financial structure ratios using cluster analysis. Two-stage clustering analysis allowed continuous and categorical variables to be analyzed together. Except for nine banks traded in the Borsa Istanbul National 100 index, the data of 91 companies were analyzed. Research findings showed that the BIST 100 index was divided into two meaningful clusters according to their financial structure ratios and two categorical variables. Fifty five risk-free companies were clustered in the first cluster, and thirty-six risky companies were clustered in the second cluster. Shareholders' equity / total asset (active) ratio, risk, short-term foreign resources / total resources (passive) ratio, current assets / total asset (active) ratio, fixed assets / total foreign resources ratio, and index were found to be essential variables in clustering companies into two clusters, respectively.