Financial Sustainability and Key Financial Indicators: A Research on Garment Production Firms

Abstract

This study examines the financial sustainability indicators of garment production firms, building on the concept of sustainable development as defined by the United Nations Brundtland Commission in 1987. Sustainable development emphasizes meeting the needs of the present generation without compromising the ability of future generations to meet their own needs. Financial sustainability, on the other hand, focuses on ensuring the continuity of business operations through long-term value creation and risk management. The research analyzes the financial data of eight garment production firms listed on Borsa Istanbul between 2016 and 2024. In addition to key internal financial ratios such as net working capital, receivables turnover ratio and cash from operations, the impact of the US dollar exchange rate, cotton price, and gross domestic product on financial sustainability was evaluated using multivariate regression analysis. The findings reveal that net working capital and cash from operations have a significant and positive effect on financial sustainability, whereas the other variables do not show a significant impact. In particular, cash from operations stands out as a critical indicator of financial sustainability, as it reflects the cash generated by a company's core activities. This study provides empirical evidence on the relationship between financial indicators and sustainability in the textile sector, highlighting the importance of responsible financial management for long-term business success and stakeholder interests.