< PreviousAUGUST 2021 49 MAIN FINANCIAL INDICATORS Financial Ratios (%) Top 500Top 500-PrivateTop 500-ICITop 500-Public 2017201820192020201720182019202020172018201920202017201820192020 Current Ratio (Current Assets / Short-Term Debts) 153.7147.1147.6154.9148.8146.3147.3155.2140.4136.7142.0150.1273.7160.1153.8149.6 Total Debts / Total Assets 62.967.068.468.465.669.470.670.166.469.069.567.737.643.744.547.4 Total Debts / Equity Capital 169.9203.4216.6216.4190.8226.4239.8234.7197.8222.7227.3209.960.277.780.290.3 Short-Term Debts / Equity Capital 60.462.160.360.261.662.560.360.269.270.567.368.341.556.260.659.0 Financial Debts / Equity Capital 92.2113.4122.9122.7103.6126.5135.5132.498.2117.3123.1108.733.042.048.355.5 Financial Debts / Total Assets 34.237.438.838.835.638.739.939.633.036.437.635.120.623.626.829.2 Equity Capital / Total Assets 37.133.031.631.634.430.629.429.933.631.030.532.362.456.355.552.6 EQUITY / TOTAL ASSETS (%) FINANCIAL DEBT / EQUITY (%) 2019 2020 122.7 2018 2017 92.2 2016 88.8 122.9 113.4 2019 2020 31.6 2018 2017 37.1 2016 38.1 31.6 33.0 Equity capital/asset ratio remained unchanged. The equity capital to total assets ratio shows to what ex- tent industrial enterprises use equity capital to finance their activities. A high ratio points to financial health. Af- ter falling by 1.4 points in 2019 to 31.6 percent, the equity capital/total assets ratio of the ISO 500 remained flat in 2020. The equity capital of industrial enterprises followed the same growth trend as their assets in 2020. The downward trend in the share of fixed assets in total assets continued. A high ratio of current assets to total assets has a positive impact on the management of working capital. However, the decline in the share of fixed assets indicates a down- turn in companies’ tendency to invest in fixed assets, or in production machinery and equipment. The ratio of fixed assets to total assets increased to 46.3 percent in 2015 before starting its decline and dropped to 39.1 percent in 2019. Deterioration in investment condi- tions, fluctuations in domestic demand and increases in financial expenses limited fixed asset investments. In 2020, the share of fixed assets fell further by 2.8 points to 36.3 percent. With the pandemic-induced global climate of uncertainty in 2020, industrial enterprises resorted to cash and liquid assets, which led to an accelerated growth in current assets. Moreover, the extraordinary conditions of 2020 limited fixed asset investments.50 AUGUST 2021 Sectoral Financial Ratios - 2020 (%) Sectors Current Ratio (Current Assets / Short-Term Debts) Total Debts / Total Assets Total Debts / Equity Capital Short-Term Debts / Equity Capital Financial Debts / Equity Capital Financial Debts / Total Assets Equity Capital / Total Assets 05-08Mining and quarrying247.847.289.330.368.836.452.8 10Manufacture of food products141.670.8243.071.9156.145.529.2 11Manufacture of beverages173.769.8231.136.8156.747.330.2 12Manufacture of tobacco products103.574.3289.398.023.86.125.7 13Manufacture of textiles167.872.4262.453.8210.558.127.6 14Manufacture of wearing apparel143.562.0163.279.368.926.238.0 16 Manufacture of wood and of products of wood and cork (except furniture) 126.982.1458.353.0284.150.917.9 17Manufacture of paper and paper products210.961.9162.551.298.937.738.1 19Manufacture of coke and refined petroleum products102.097.23.425.449.02.107.859.82.8 20Manufacture of chemicals and chemical products149.364.0177.868.1118.942.836.0 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 270.337.560.065.033.921.262.5 22Manufacture of rubber and plastic products152.169.0222.467.2123.938.431.0 23Manufacture of other non-metallic mineral products173.365.1186.945.2120.041.834.9 24Manufacture of basic metals148.867.7209.370.3118.338.232.3 25 Manufacture of fabricated metal products (except machinery and equipment) 217.359.4146.061.033.313.540.6 26 Manufacture of computer, electronic and optical products 162.864.7183.074.742.815.135.3 27Manufacture of electrical equipment168.467.2204.868.099.132.532.8 28Manufacture of machinery and equipment N.E.C.264.544.279.269.633.518.755.8 29Manufacture of motor vehicles, trailers and semi-trailers143.072.5264.271.2116.432.027.5 30Manufacture of other transport equipment261.480.5412.339.1130.425.519.5 31Manufacture of furniture266.140.467.762.222.913.659.6 32Other manufacturing233.463.0170.261.3131.848.837.0 32.1 Manufacture of jewellery, bijouterie and related articles 233.463.0170.261.3131.848.837.0 35Electricity, gas, steam and air conditioning supply94.465.7191.845.5127.343.634.3 Total154.968.4216.460.2122.738.831.6PROFITABILITY INDICATORS External conditions play a role in the profitability of enterprises along with their business performances.52 AUGUST 2021 The number of profitable enterprises increased. The number of ISO 500 enterprises that record a profit or loss may vary from year to year. As part of the survey, the number of enterprises that record earnings before interest, tax, depreciation and amortization have also been evaluated since 2013. This indicator, abbreviated as EBITDA, is a more accurate measure of enterprises’ profitability performance. In 2020, the number of ISO 500 enterprises that recorded a profit jumped from 411 to 423, and the number of enterp- rises that recorded a loss dropped from 89 to 77. Industrial enterprises not only prioritized staying liquid and in cash in the sales, profitability and financial conditions of 2020, but also focused on improving their profitability. In this period, the decrease in financial costs was one of the drivers of the relative increase in their profitability performances. Return on sales climbed to 7 percent. Return on sales (ROS) is calculated by dividing the total pro- fit and loss for the period by the net sales of the ISO 500. On a year-over-year basis, the number of profitable ISO 500 enterprises was higher in 2020 and their ROS also improved significantly with a 1.6-point increase in 2020 to 7 percent, which is the second highest rate after 2017 in the last de- cade. This increase was due to two reasons: Firstly, the gross ROS of the firms followed an upward trajectory. As input and raw material prices went down and fluctuated throughout 2020, the production cost was lower, which boosted gross ROS. Secondly, profit and income from FX was high due to the exchange rate developments. Backed by these two deve- lopments, ROS increased to 7 percent in 2020. The sectors with the highest ROS in 2020 were mining and quarrying at 34.8 percent, and manufacture of pharmaceutical products at 29 percent. The sectors with the lowest ROS were manufacture of refined petroleum products with negative profi- tability (minus 6.6 percent), manufacture of jewelry (0.3 percent) and electricity, gas, steam and air conditioning supply (1.7 per- cent). Return on assets reached 7.2 percent. Return on assets (ROA) is calculated by dividing the ratio of total pre-tax profit and loss for the period to assets. In 2020, ROA increased by 1.3 percent to reach 7.2 percent. ROA, which declined in 2019 after recovering in 2017 and 2018, reclaimed its upward trajectory with a significant increase in 2020. In the unique conditions of 2020, industrial enterprises focused on leveraging their current assets to drive more profit. The manufacture of pharmaceutical products generated the highest ROA in 2020 with 22.7 percent. The manufacture of machinery and equipment ranked second with 18.8 percent. Other sectors with high ROA were the manufacture of fabri- cated metal products with 15.3 percent, mining and quarrying with 13.9 percent, and the manufacture of furniture with 13.8 percent. There were 10 sectors with an ROA of 10 percent or more. In most of the sectors, ROA was up YoY. The manufac- ture of refined petroleum products recorded the lowest ROA at RETURN ON SALES (%) RETURN ON ASSETS (%) 9 6 3 0 2011 6.8 2012 6.7 2013 5.3 2014 6.0 2015 5.6 2016 6.2 2017 7.5 2018 7.2 2020 7.2 2019 5.9 8 6 4 2 0 2012 5.7 2014 5.7 2016 6.8 2017 7.2 2018 6.4 20192020 5.4 7.0 2011 5.6 2015 5.6 2013 4.9 # OF ENTERPRISES THAT RECORD PROFIT OR LOSS (Profit/Loss Before Tax) PROFIT (#) LOSS (#) 2018201720192020 422 381 411 423 78 119 89 77AUGUST 2021 53 minus 7.2 percent. The electricity, gas, steam and air con- ditioning supply was also among the sectors recording the lowest ROA with 1.1 percent. Return on equity rose to 22.7 percent. Return on equity (ROE) is the ratio of total profit and loss for the period to equity. ROE indicates the amount of pro- fit that companies make with the equity capital they own and utilize for their activities. The ROE of the ISO 500, which showed a noteworthy upward trend in between 2016 and 2018, had its best run in recent years in 2018 with 21.9 percent. In 2019, howe- ver, it dropped to 18.6 percent due to weak profitability. In 2020, companies were able to leverage their existing equity capital to drive more profit and ROE climbed back to 22.7 percent. The manufacture of fabricated metal products enjoyed the highest ROE in 2020 with 37.7 percent. ROE also soared in the manufacture of motor vehicles with 36.4 percent, the PROFITABILITY INDICATORS Return on Sales [Total Profit and Loss for the Period (Before Tax)/ Net Sales] (%) 201220132014201520162017201820192020 Top 500 Industrial Enterprises5.74.95.75.66.87.26.45.47.0 Private Enterprises5.34.16.15.25.67.16.15.36.9 Public Enterprises13.619.1-1.914.132.910.113.66.67.9 Return on Equity [Total Profit and Loss for the Period (Before Tax)/ Equity Capital] (%) 201220132014201520162017201820192020 Top 500 Industrial Enterprises14.312.314.014.016.220.221.918.622.7 Private Enterprises15.912.117.014.915.522.923.820.624.9 Public Enterprises8.113.1-1.28.919.46.011.86.97.6 Return on Assets [Total Profit and Loss for the Period (Before Tax)/ Total Assets] (%) 201220132014201520162017201820192020 Top 500 Industrial Enterprises6.75.36.05.66.27.57.25.97.2 Private Enterprises6.84.76.85.55.47.97.36.17.4 Public Enterprises6.310.1-0.96.012.63.76.63.84.0 25 20 15 10 5 0 RETURN ON EQUITY (%) 2017201820192020201620152014201320122011 14.8 14.3 12.3 14.014.0 16.2 20.2 21.9 18.6 22.7 manufacture of pharmaceutical products with 36.3 per- cent, and the manufacture of electrical equipment with 36.2 percent. The manufacture of refined petroleum pro- ducts had the lowest ROE at minus 255.2 percent54 AUGUST 2021 Sectoral Profitability Ratios - 2020 (%) Sectors Top 500Private EnterprisesPublic Enterprises Return on Sales Return on Assets Return on Equity Return on Sales Return on Assets Return on Equity Return on Sales Return on Assets Return on Equity 05-08Mining and quarrying34.813.926.341.226.246.718.63.87.6 10Manufacture of food products2.94.113.94.16.018.5-17.3-12.2-1.777.1 11Manufacture of beverages7.03.310.87.03.310.8--- 12Manufacture of tobacco products8.68.031.38.68.031.3--- 13Manufacture of textiles6.74.415.96.74.415.9--- 14Manufacture of wearing apparel5.98.221.65.98.221.6--- 16 Manufacture of wood and of products of wood and cork (except furniture) 7.65.731.77.65.731.7--- 17Manufacture of paper and paper products11.212.633.111.212.633.1--- 19 Manufacture of coke and refined petroleum products -6.6-7.2-255.2-6.6-7.2-255.2--- 20 Manufacture of chemicals and chemical products 13.711.231.010.78.928.057.039.543.9 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 29.022.736.329.022.736.3--- 22Manufacture of rubber and plastic products7.37.123.07.37.123.0--- 23 Manufacture of other non-metallic mineral products 11.66.017.211.55.917.013.914.627.4 24Manufacture of basic metals6.58.726.96.58.726.9--- 25 Manufacture of fabricated metal products (except machinery and equipment) 16.015.337.714.614.437.529.821.438.6 26 Manufacture of computer, electronic and optical products 19.19.426.719.19.426.7--- 27Manufacture of electrical equipment9.511.936.29.511.936.2--- 28 Manufacture of machinery and equipment N.E.C. 19.418.833.719.418.833.7--- 29 Manufacture of motor vehicles, trailers and semi-trailers 5.410.036.45.410.036.4--- 30Manufacture of other transport equipment6.01.68.16.01.68.1--- 31Manufacture of furniture11.713.823.111.713.823.1--- 32Other manufacturing0.32.77.20.32.77.2--- 32.1 Manufacture of jewellery, bijouterie and related articles 0.32.77.20.32.77.2--- 35 Electricity, gas, steam and air conditioning supply 1.71.13.22.31.39.30.80.60.9 Total7.07.222.76.97.424.97.94.07.6AUGUST 2021 55 The number of enterprises with a positive EBITDA reached its survey high. Absolute EBITDA of enterprises and EBITDA to net sales ratio (alongside that in proportion to equity capital and to total assets) are indicators that are increasingly used in analyses and evaluations. Accordingly, the ISO 500 survey has included EBITDA calculations and evaluations since its 2013 edition. In 2020, the number of industrial enterprises with a po- sitive EBITDA reached its highest level since 2013. The number of enterprises with positive EBITDA increased by nine YoY to reach 492 in 2020. EBITDA at its highest since 2013. In 2020, the EBITDA of the ISO 500 recorded a 43.1 per- cent increase to hit TL 184.4 billion. EBITDA, which has been calculated since 2013, had increased gradually and steadily until 2018, and declined for the first time in 2019 following an 8.1 percent drop. In 2020, the EBITDA of in- dustrial enterprises saw a high rate of growth. Being faced with the impacts of the pandemic in 2020, industrial enterprises concentrated their efforts on their core activities. In this period, enterprises tried to adapt to the conditions that define the new normal, and at the same time, they explored new sales opportunities while managing their costs and risks better. EBITDA ratios increased. In 2020, the ISO 500’s EBITDA margins recorded an inc- rease over the previous year. The EBITDA/net sales ratio climbed to 13.9 percent in 2020, up from 11.3 percent in 2019. In the same period, the EBITDA/assets ratio rose to 14.3 percent, up from 12.3 percent, and the EBITDA/ equity ratio to 45.3 percent from 39 percent. CHANGES IN EBITDA MARGINS (%) 2017 2018 20192020 EBITDA/Net Sales12.914.211.313.9 EBITDA/Total Assets 13.315.912.314.3 EBITDA/Equity36.048.439.045.3 EBITDA INDICATORS (%) 13.9 14.2 15.2 7.6 3.8 7.3 50.8 ISO 500 Public Enterprises Private Enterprises 14.3 45.3 EBITDA/Net SalesEBITDA/Total AssetsEBITDA/Equity 200 150 100 50 0 EBITDA (TL BILLION) # OF ENTERPRISES THAT RECORDED PROFIT OR LOSS IN TERMS OF EBITDA (Earnings Before Tax, Interest, Depreciation and Amortization) PROFITLOSS 2017 201820192020 2016 484488488483492 16121217856 AUGUST 2021 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) - (TL) Sectors 20192020 EBITDA EBITDA/ Net Sales (%) EBITDA EBITDA/ Net Sales (%) 05-08Mining and quarrying9,037,505,06433.212,026,652,74336.9 10Manufacture of food products 12,675,061,9868.815,587,611,2958.5 11Manufacture of beverages1,211,378,16412.31,054,484,17111.2 12Manufacture of tobacco products 804,664,88711.9878,209,04611.9 13Manufacture of textiles 6,580,266,46716.311,193,849,26823.4 14Manufacture of wearing apparel982,952,6677.81,468,211,33711.7 16 Manufacture of wood and of products of wood and cork (except furniture) 1,783,332,08914.13,105,513,49018.6 17Manufacture of paper and paper products 2,639,837,75416.13,971,041,95219.8 19Manufacture of coke and refined petroleum products4,742,745,1093.71,088,685,5701.1 20Manufacture of chemicals and chemical products 11,904,493,65918.116,192,621,41621.5 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 2,619,961,56430.53,757,608,22133.3 22Manufacture of rubber and plastic products3,865,882,67813.86,128,738,74618.1 23Manufacture of other non-metallic mineral products 4,566,837,13619.78,784,807,18523.7 24Manufacture of basic metals13,296,361,1546.828,140,657,74211.8 25 Manufacture of fabricated metal products (except machinery and equipment) 4,090,225,33717.86,955,636,04021.4 26Manufacture of computer, electronic and optical products5,513,584,10922.87,112,550,76524.6 27Manufacture of electrical equipment 7,176,016,23210.512,502,291,66814.9 28Manufacture of machinery and equipment N.E.C.2,464,294,42615.04,581,813,30719.8 29Manufacture of motor vehicles, trailers and semi-trailers 17,390,314,6849.024,462,147,36910.9 30Manufacture of other transport equipment3,865,916,98024.83,147,464,97024.9 31Manufacture of furniture 634,727,13011.0932,344,97313.0 32Other manufacturing141,068,6120.7482,058,2851.3 32.1Manufacture of jewellery, bijouterie and related articles 141,068,6120.7482,058,2851.3 35Electricity, gas, steam and air conditioning supply 10,634,979,63619.010,670,952,45420.8 Total128,868,499,38411.3184,446,547,33113.9AUGUST 2021 57 Operating profitability improved. Operating profit is another profitability indicator used to measure the profitability of an enterprise. Operating profit is calculated by deducting operating expenses from gross ROS and dividing the resulting figure by net sales. In 2020, operating profit of the ISO 500 enjoyed a 2.7-point jump, reaching 10.8 percent, up from 8.1 percent. Absolu- te total operating profits grew from TL 92.1 billion in 2019 to TL 142.8 billion in 2020 with a 55 percent increase. Ab- solute operating profit recorded significant growth. In 1H20, industrial enterprises were able to drive their expenses down by leveraging the drop in input and raw material prices. In second half of the year, however, sales prices mirrored the increase in costs that marked the pe- riod in question. As a result, there was a significant incre- ase in gross ROS and operating profit. Against the backdrop of the adverse conditions created by the pandemic, the ISO 500 maximized their control on operating expenses, limiting the rate of increase to 13 percent. On a per-sector basis, the highest absolute operating profit was generated once again by the manufacture ba- sic metals with TL 24.1 billion. The second highest was the manufacture of motor vehicles with TL 17.2 billion. OPERATING PROFITS BY SECTOR (TL MILLION) Manufacture of basic metals Manufacture of motor vehicles, trailers and semi-trailers Manufacture of chemicals and chemical products Manufacture of food products Manufacture of electrical equipment Manufacture of textiles Mining and quarrying Manufacture of other non-metallic mineral products Electricity, gas, steam and air conditioning supply Manufacture of fabricated metal products (except machinery and equipment) Manufacture of computer, electronic and optical products Manufacture of rubber and plastic products Manufacture of machinery and equipment, not elsewhere classified Manufacture of basic pharmaceutical products and pharmaceutical preparations Manufacture of paper and paper products Manufacture of other transport equipment Manufacture of wood and of products of wood and cork (except furniture) Manufacture of wearing apparel Manufacture of furniture Manufacture of tobacco products Manufacture of jewellery, bijouterie and related articles Manufacture of beverages Manufacture of coke and refined petroleum products 24,137 17,182 13,839 12,344 9,998 9,270 8,855 6,753 6,692 6,498 6,382 4,895 3,980 3,485 3,317 2,578 2,481 1,146 844 633 546 352 -3,626 0-5,000-10,0005,00010,00015,00020,00025,00030,00058 AUGUST 2021 The manufacture of chemicals and chemical products rose to the third place with an operating profit of TL 13.8 billion. The manufacture of food products, on the other hand, fell to fourth place with an operating profit of TL 12.3 billion. In terms of operating profit rates, one of the top three se- ctors changed in 2020. The manufacture of basic phar- maceutical products came in first once again with 30.9 percent. Mining and quarrying took over the second-place title from the manufacture of other transportation equ- ipment with an operating profit of 27.2 percent. Same as last year, the manufacture of computer, electronic and optical products was the second runner-up with an operating profit of 22.1 percent. The manufacture of ot- her transport equipment fell to the fourth place with 20.4 percent. Coming in second and third, respectively, to last above the manufacture of refined petroleum products, which had a negative operating profit, were the manufacture of jewelry with an operating profit of 1.5 percent, and manu- facture of beverages with 3.7 percent. OPERATING PROFIT RATES BY SECTOR (%) Manufacture of basic pharmaceutical products and pharmaceutical preparations Mining and quarrying Manufacture of computer, electronic and optical products Manufacture of other transport equipment Manufacture of fabricated metal products (except machinery and equipment) Manufacture of textiles Manufacture of chemicals and chemical products Manufacture of other non-metallic mineral products Manufacture of machinery and equipment, not elsewhere classified Manufacture of paper and paper products Manufacture of wood and of products of wood and cork (except furniture) Manufacture of rubber and plastic products Electricity, gas, steam and air conditioning supply Manufacture of electrical equipment Manufacture of furniture Manufacture of basic metals Manufacture of wearing apparel Manufacture of tobacco products Manufacture of motor vehicles, trailers and semi-trailers Manufacture of food products Manufacture of beverages Manufacture of jewellery, bijouterie and related articles Manufacture of coke and refined petroleum products 0.0-10.010.020.030.040.0 30.9 27.2 22.1 20.4 20.0 19.4 18.4 18.2 17.2 16.5 14.8 14.5 13.0 11.8 10.1 9.2 9.0 7.7 6.7 3.7 1.5 -3.6 11.9Next >