An implementation with data envelopment analysis on the relationship between cost, profitability and performance in stock exchange companies: The case of manufacturing enterprises

Many qualitative and quantitative factors contribute to the sustainability and performance of businesses. Cost structure and profitability, which are among the quantitative factors, affect the performance of the enterprises as a whole. It is important for manufacturing companies to examine the effect of cost structure and profitability on performance from the perspective of efficiency and effectiveness. In this empirically-based scientific research, the relationship between cost structure, profitability, and performance in a sample of manufacturing enterprises was examined using the data envelopment analysis method. In the research, the data of 21 enterprises operating in the textile business line were evaluated using input and output-oriented data envelopment analysis methods. Before the analysis, the concepts of cost structure and profitability were discussed in detail. Afterward, the relationship between performance and efficiency in enterprises is explained. According to the results of data envelopment analysis, the efficiency values of textile enterprises in 2018 were found to be higher than in 2019. It is seen that enterprises with low-efficiency scores in 2018 mainly have high sales costs and marketing expenses. The fact that these expenses have a large share in the cost structure negatively affected the profitability and return on assets of the enterprises and reduced efficiency. In 2019, it is seen that fixed expenses have an increasing weight in the cost structure. The increase in general administrative expenses lowered the efficiency score compared to the previous year and decreased the performance of the enterprises. In the same period, the profitability and asset values showed a decreasing trend compared to the previous year. In the light of the findings obtained in the research, managerial and theoretical suggestions were presented to improve performance in manufacturing enterprises.