Özet:

Managing the inventory, which is a physical component of companies and directly influences the profits, is of vital importance. For the companies, managing their inventories successfully would both decrease the inventory costs and increase the customer satisfaction by accelerating the company’s operating flows. Thus, the companies with successful inventory policies would be able to receive satisfactory profits and contribute to the national economy. From this aspect, the present study aims to explain the relationship between profitability and inventory contributing to the financial success of companies. In parallel with this objective, the financial ratio of companies in the Istanbul Stock Exchange’s manufacturing sector between 2013 and 2018 were used. The study employs regression and correlation analysis in explaining the relationship between financial ratios related to inventory management and profitability. As a result of the analyses, it was determined that the inventory turnover has a positive and significant relationship with the rate of return on assets, gross working capital, and the rate of return on equity, whereas it negatively affects the rate of return on gross operating capital and the rate of real operating profits. The ratio of inventory/net operating capital was found to have a significant positive relationship with real operating profitability and rate of return on equity and a significant negative relationship with return on gross operating capital. Moreover, the ratio of inventory/current assets was found to have a significant negative relationship with the rate of return on assets, the rate of return on gross operating capital, and the rate of return on equity and the growth rate of inventory was found to have a positive relationship with all the profitability rates

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