IDEAS home Printed from https://ideas.repec.org/a/bbl/journl/v26y2023i3p92-108.html
   My bibliography  Save this article

Applying an integrated data-driven weighting system – CoCoSo approach for financial performance evaluation of Fortune 500 companies

Author

Listed:
  • Nazli Ersoy

    (Osmaniye Korkut Ata University)

Abstract

Financial performance evaluation provides information about a firm’s liquidity position, profitability, capital structure and asset utilization. Financial performance evaluation is considered as a multi-criteria decision making (MCDM) problem, as it is a multidimensional concept that is realized by bringing together multiple indicators. This study is aimed to evaluate the financial performance of the Fortune 500 companies by using the integrated data-driven weighting system (IDDWS) – combined compromise solution (CoCoSo) approach. The criteria weights were calculated with the IDDWS and the companies were ranked by the CoCoSo method. In the last stage, a three-stage sensitivity analysis was performed to test the robustness of the model. In the first stage, 15 scenarios were defined by changing the criteria weights. In the second stage, the rankings of the CoCoSo method were compared with the other MCDM methods [range of value (ROV), proximity indexed value (PIV), complex proportional assessment (COPRAS), Biswas and Saha’s method]. In the third stage, a sensitivity analysis was conducted under five different scenarios based on different ? parameters. It was determined that the rankings obtained as a result of the sensitivity analysis show small deviations and except for a few companies, the ranking of most companies remained the same. The results show that the proposed model is suitable for measuring financial performance and Alphabet performs best. The suitability of the proposed model for measuring financial performance was tested for the first time. It is thought that the comparative use of many MCDM methods through a comprehensive sensitivity analysis will contribute to the literature.

Suggested Citation

  • Nazli Ersoy, 2023. "Applying an integrated data-driven weighting system – CoCoSo approach for financial performance evaluation of Fortune 500 companies," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 26(3), pages 92-108, September.
    • Handle: RePEc:bbl:journl:v:26:y:2023:i:3:p:92-108
    DOI: 10.15240/tul/001/2023-3-006
    as

    Download full text from publisher

    File URL: https://doi.org/10.15240/tul/001/2023-3-006
    Download Restriction: no
    File URL: https://libkey.io/10.15240/tul/001/2023-3-006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Mohamed Abdel-Basset & Weiping Ding & Rehab Mohamed & Noura Metawa, 2020. "An integrated plithogenic MCDM approach for financial performance evaluation of manufacturing industries," Risk Management, Palgrave Macmillan, vol. 22(3), pages 192-218, September.
    2. Varmazyar, Mohsen & Dehghanbaghi, Maryam & Afkhami, Mehdi, 2016. "A novel hybrid MCDM model for performance evaluation of research and technology organizations based on BSC approach," Evaluation and Program Planning, Elsevier, vol. 58(C), pages 125-140.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yousaf Muhammad & Dey Sandeep Kumar, 2022. "Best proxy to determine firm performance using financial ratios: A CHAID approach," Review of Economic Perspectives, Sciendo, vol. 22(3), pages 219-239, September.
    2. Anas A. Makki & Ammar Y. Alqahtani, 2023. "Capturing the Effect of the COVID-19 Pandemic Outbreak on the Financial Performance Disparities in the Energy Sector: A Hybrid MCDM-Based Evaluation Approach," Economies, MDPI, vol. 11(2), pages 1-21, February.
    3. Qi-Gan Shao & James J. H. Liou & Sung-Shun Weng & Yen-Ching Chuang, 2018. "Improving the Green Building Evaluation System in China Based on the DANP Method," Sustainability, MDPI, vol. 10(4), pages 1-20, April.
    4. Barak, Sasan & Javanmard, Shima, 2020. "Outsourcing modelling using a novel interval-valued fuzzy quantitative strategic planning matrix (QSPM) and multiple criteria decision-making (MCDMs)," International Journal of Production Economics, Elsevier, vol. 222(C).
    5. Kheybari, Siamak & Rezaie, Fariba Mahdi & Farazmand, Hadis, 2020. "Analytic network process: An overview of applications," Applied Mathematics and Computation, Elsevier, vol. 367(C).
    6. Seyed Morteza Hatefi & Hamideh Asadi & Gholamreza Shams & Jolanta Tamošaitienė & Zenonas Turskis, 2021. "Model for the Sustainable Material Selection by Applying Integrated Dempster-Shafer Evidence Theory and Additive Ratio Assessment (ARAS) Method," Sustainability, MDPI, vol. 13(18), pages 1-23, September.
    7. Arunodaya Raj Mishra & Ayushi Chandel & Parvaneh Saeidi, 2022. "Low-carbon tourism strategy evaluation and selection using interval-valued intuitionistic fuzzy additive ratio assessment approach based on similarity measures," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 7236-7282, May.
    8. Barak, Sasan & Dahooei, Jalil Heidary, 2018. "A novel hybrid fuzzy DEA-Fuzzy MADM method for airlines safety evaluation," Journal of Air Transport Management, Elsevier, vol. 73(C), pages 134-149.
    9. Quezada, Luis E. & López-Ospina, Héctor A. & Ortiz, César & Oddershede, Astrid M. & Palominos, Pedro I. & Jofré, Paulina A., 2022. "A DEMATEL-based method for prioritizing strategic projects using the perspectives of the Balanced Scorecard," International Journal of Production Economics, Elsevier, vol. 249(C).
    10. Ehsan Pourjavad & Rene V. Mayorga, 2019. "A comparative study and measuring performance of manufacturing systems with Mamdani fuzzy inference system," Journal of Intelligent Manufacturing, Springer, vol. 30(3), pages 1085-1097, March.
    11. Gawlik, Remigiusz, 2016. "Encompassing the Work-Life Balance into Early Career Decision-Making of Future Employees Through the Analytic Hierarchy Process," MPRA Paper 80260, University Library of Munich, Germany.
    12. Jianxiong Chen & Chung-Cheng Yang, 2021. "Competitive Revenue Strategies in the Medical Consumables Industry: Evidence from Human Resources, Research and Development Expenses and Industry Life Cycle," IJERPH, MDPI, vol. 18(6), pages 1-20, March.
    13. Ahmet Kaya & Dragan Pamucar & Hasan Emin Gürler & Mehmet Ozcalici, 2024. "Determining the financial performance of the firms in the Borsa Istanbul sustainability index: integrating multi criteria decision making methods with simulation," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 10(1), pages 1-44, December.
    14. Jalil Heidary Dahooie & Ali Husseinzadeh Kashan & Zahra Shoaei Naeini & Amir Salar Vanaki & Edmundas Kazimieras Zavadskas & Zenonas Turskis, 2022. "A Hybrid Multi-Criteria-Decision-Making Aggregation Method and Geographic Information System for Selecting Optimal Solar Power Plants in Iran," Energies, MDPI, vol. 15(8), pages 1-20, April.
    15. Moraga, Javier A. & Quezada, Luis E. & Palominos, Pedro I. & Oddershede, Astrid M. & Silva, Hernán A., 2020. "A quantitative methodology to enhance a strategy map," International Journal of Production Economics, Elsevier, vol. 219(C), pages 43-53.
    16. Monica-Laura ZLATI (SORICI) & Svetlana MIHAILA & Veronica GROSU, 2022. "Financial Performance Analysis From A Social Welfare Perspective - A Comparative Study Romania-Moldova," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 8(1), pages 63-76, June.
    17. Jamali, Narjes & Feylizadeh, Mohammad Reza & Liu, Peide, 2021. "Prioritization of aircraft maintenance unit strategies using fuzzy Analytic Network Process: A case study," Journal of Air Transport Management, Elsevier, vol. 93(C).
    18. Omrani, Hashem & Valipour, Mahsa & Emrouznejad, Ali, 2021. "A novel best worst method robust data envelopment analysis: Incorporating decision makers’ preferences in an uncertain environment," Operations Research Perspectives, Elsevier, vol. 8(C).
    19. Eva Benková & Peter Gallo & Beáta Balogová & Jozef Nemec, 2020. "Factors Affecting the Use of Balanced Scorecard in Measuring Company Performance," Sustainability, MDPI, vol. 12(3), pages 1-18, February.
    20. Yelda Ayrim & Kumru Didem Atalay & Gülin Feryal Can, 2018. "A New Stochastic MCDM Approach Based on COPRAS," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 17(03), pages 857-882, May.

    More about this item

    Keywords

    Financial performance; multi-criteria decision making (MCDM); data-driven weighting system (IDDWS); combined compromise solution (CoCoSo);
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bbl:journl:v:26:y:2023:i:3:p:92-108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vendula Pospisilova (email available below). General contact details of provider: https://edirc.repec.org/data/hflibcz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.