Evaluating Financial Performance with SPC-LOPCOW-MARCOS Hybrid Methodology: A Case Study for Firms Listed in BIST Sustainability Index

Abstract

Periodic analysis of financial performance is instrumental in enabling manufacturing firms to enhance their operational efficiency, manage risks effectively, make strategic decisions, maintain a competitive advantage, ensure sustainability, and promote good corporate governance. This research introduces an innovative decision-making methodology for evaluating and ranking the financial performance of firms by utilizing financial ratio metrics. To this end, the present study puts forward a novel decision-making methodology for evaluating the performance of a corporation, integrating the Symmetry Point Criterion (SPC), the Logarithmic Percentage Change Based Objective Weighting (LOPCOW), and the Measurement of Alternatives and Ranking by Consensus Solution (MARCOS). The feasibility of the proposed decision approach in the existing work is evaluated through a real-time case study. The case analysis concentrates on the financial performance assessment of 16 real sector firms whose shares are traded in the Borsa Istanbul (BIST) Sustainability 25 Index (XSD25). In order to examine the financial performance of firms in the real sector, ten financial performance indicators are selected based on earlier literature. The SPC and LOPCOW procedures were applied to ascertain the weight values of the assessment indicators, and the MARCOS procedure was employed to rank the firms' financial performance. The findings of the weighting process indicate that the three most influential criteria are the ratio of total debt to total equity, the return on equity, and the average price-earnings ratio. According to the MARCOS ranking procedure, ENKAI was the company with the highest financial performance compared to its peers during the analysis period.