Financial performance analysis with multi criteria desicion making methods by using financial statements

The financial analysis of a company is an important issue for both the management of the company and the institutions and organizations which are in interaction with the company. Financial analysis requires simultaneously observing and inspecting several parameters relating to the company. Many ratios should be evaluated and decisions have to be made at the same. For the evaluation of general performance analysis of company, the reduction of these parameters is needed. Under these circumstances, Multi Criteria Decision Making (MDCM) models which ensure making decisions with lots of point of views enabling interfirm comparisons by reducing calculated financial ratios into one performance score. Hence, in operation research literature, financial performance analysis studies with MCDM models are frequently used. In this study, different MCDM models based on financial ratios are used to evaluate the performance analysis of a company. The MCDM models used are, VIKOR, TOPSIS, GRA and MOORA methods. Additionally, criteria weighting were also evaluated. On the other hand, criteria weighting methods were examined with two main groups, as objective and subjective weighting. Entropy, CRITIC, Standard Deviation and Equal Weighting methods were studied as objective weighting methods. AHP represented subjective weighting methods. The sample comprised sixty four companies which are included in both of BIST Industry Index and Star Market companies Index. 2013-2016 was used as the sample period. It was observed that results which were found by MCDM models haven't differentiated with different weighting methods except VIKOR and MOORA-Reference Point Approach. Provided that weighting method doesn't change it was observed that the results of different MDCM models are in statistically meaningful relationships. The results of MCDM are in meaningful relationships also in different time horizons. In addition, it was examined that results with different weighting and MCDM models in statistically relationship with P/B ratio or not. In 2013 and 2015 AHP based VIKOR results are in a statistically relationship with P/B ratio. In 2015 AHP based TOPSIS, in 2013 AHP and Entropy based MOORA-Referance Point Approach and in 2014, Entropy based MOORA-Referance Point Approach results are also in a statistically meaningful relationships with P/B ratio.