Financial performance evaluation and the relationship between stock returns: Hesitant Fuzzy AHP based approach

The concept of financial performance is an important issue for all companies and organizations. The financial performance evaluation process allows determining the positive or negative aspects of a business compared to competing companies. Such that, while comparing itself with competitive companies in a competitive environment, it determines its position in the sector, thus contributing to the process of making optimum decisions in the management process of the enterprise. In addition to the benefits of financial performance evaluation to company managers, it is expected to contribute to stock investors in the decision process. The main reason for this is that investors tend to invest in companies where financial management is successful. The main purpose of this study is evaluate the financial performance with a new integrated approach in the banking sector which we can qualify as the heart of economies, and to determine whether financial performance can be used as a single decision factor in stock investment. In this study financial performance of 10 commercial bank was evaluated which are operating in turkey and traded on BISTXBANK index, for period of 2008-2017. According to the evaluation results, were created two groups of portfolios. The returns of these portfolios were analyzed various quantitative techniques. In the study, 7 main and 23 sub criteria which is financial ratio, were used for financial performance evaluation purposes. The Hesitant Fuzzy AHP method was used to determine the importance weights of the criteria and TOPSIS and GRA methods were used to rank to sort the alternatives. A new performance evaluation approach has been presented to the literature with the integrated use of Hesitant Fuzzy AHP-TOPSIS and Hesitant Fuzzy AHP-GRA methods. Independent samples t tests was used to statistically examine the difference in returns between the two groups of portfolios created according to financial performance results. As a result of the study, it has been concluded that the methods used can be used in financial performance evaluation, and that these methods are applicable in creating a portfolio. However, when the portfolios are evaluated quantitatively, even if successful results are obtained, it is seen that there is no statistical difference between the portfolios. According to these results, it was observed that financial performance alone was not an adequate decision factor in stock investment. When using these methods for stock investment, it is recommended to include other factors affecting stock prices in the hierarchical structure.