Evaluation of the financial performance of firm operating in the food and beverage sector using artificial neural networks: An international comparative analysis

The main objective of this study is to evaluate the financial performance of firms operating in the food and beverage sector using artificial neural networks. An international comparison has been made in accordance with fundamental analysis. Firms operating in the food and beverage sector from countries in Asia, Europe, and North America, for which data was available, have been included in the study. The artificial neural networks method has been employed for data analysis in this study. Factors affecting financial success or failure have been ranked according to their significance levels. Following the analyses conducted for each continent, a comparison among the three continents has been made. In the analysis results focused on Europe, the most significant variable affecting the financial success or failure of businesses was found to be the Active Profitability Ratio. The next four variables in order of significance are: Gross Profit Margin, Foreign Resource Ratio, Debt Turnover Ratio, and Working Capital Turnover Ratio. The variable with the least importance in determining whether businesses are successful or unsuccessful was identified as the Equity Ratio. According to the model results for the Asian continent, the most significant variable affecting the financial success or failure of businesses was the Ratio of Equity to Total Foreign Resources. The next four variables in order of significance are: Working Capital Turnover Ratio, Short-Term Foreign Resource Ratio, Ratio of Current Assets to Total Assets, and Equity Ratio. The variable with the least importance in determining success or failure was identified as the Long-Term Foreign Resource Ratio. In the model results for North America, the most significant variable affecting financial success or failure was the Current Ratio. The next four variables in order of significance are: Active Profitability Ratio, Ratio of Equity to Total Foreign Resources, Ratio of Fixed Assets to Total Foreign Resources, and Cash Ratio. The variable with the least importance was identified as the Active Turnover Ratio. In the model results specific to Turkey, the most significant variable affecting financial success or failure was found to be the Gross Profit Margin. The next four variables in order of significance are: Acid-Test Ratio, Foreign Resource Ratio, Ratio of Current Assets to Total Assets, and Active Turnover Ratio. The variable with the least importance was identified as the Short-Term Foreign Resource Ratio. When comparing the top five factors affecting the financial performance of businesses in the food and beverage sector across Europe, Asia, and North America based on their significance levels, the Active Profitability Ratio appears in both Europe and North America. Additionally, the Working Capital Turnover Ratio is among the top five factors in both Europe and North America. The Ratio of Equity to Total Foreign Resources is included in the top five factors in both Asia and North America. In the light of the results obtained, recommendations were developed for both business managers and academicians.