Abstract:

This study has three objectives. One of them is to determine if there are any differences between financial ratios which obtained from financial statements prepared with different accounting regulations. The second and third purposes of the study are to determine the relationship between market values, stock returns of companies and financial ratios which obtained from financial statements prepared with different accounting regulations and also to mention about whether these relations differ from each other. The financial statements were prepared in accordance with UFRS in 2005 for the first time for companies being dealt in exchange, and data belonging to the year 2004 were re-organized to compare these financial statements. So stock price returns and market values consisted of unsuitable data for UFRS during the year 2004. In other words, it was not possible for 2004 data adapted to UFRS at the end of the period 2005 to affect stock prices in companies in 2004. This study has been developed as an advisory model for the situations it is possible to reach a comparable data set since it is impossible to provide another data set for the second and third aim of the study. 91 companies activating in ISE (Istanbul Stock Exchange) manufacturing sector in 2004 are included in this study. Research findings show statistically meaningful differences between financial ratios which obtained from financial statements prepared to IFRS and unprepared to IFRS in Turkey in relation to the year 2004. Results are that financial ratios which obtained from financial statements unprepared to IFRS are more predominant than financial ratios which obtained from financial statements prepared to IFRS in describing stock returns and market values of companies. Finally, it can be said that investors of companies use financial ratios which obtained from financial statements unprepared to IFRS instead of financial statements prepared to IFRS while making investment decisions in relation to the year 2004.

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