A HYBRID MCDM FRAMEWORK FOR EVALUATING CORPORATE FINANCIAL PERFORMANCE

Özet

In today’s competitive market conditions, companies need to increase their financial performance and implement effective performance measurement strategies, while improving their business processes. This paper introduces a methodology based on a hybrid multi-criteria decision-making (MCDM) approach, which is designed to assist companies in evaluating the extent to which they have attained their financial performance targets. The propounded decision-making framework employs the Grey entropy technique to ascertain the relative importance of the predetermined criteria, and subsequently, the Grey relational analysis model is utilized to priorities the decision alternatives. The present article employs a case study approach to evaluate the financial performance of a reinsurance company. Our aim is to assist decision-makers in making integrated decisions regarding financial performance and improving sustainability. Grey entropy’s findings show that return on average equity, combined ratio vs return on average assets are the three most important indicators affecting corporate financial performance. According to the Grey relationship analysis results, the best and worst performance years in terms of financial performance were determined as 2020 and 2022, respectively.

Abstract

In today’s competitive market conditions, companies need to increase their financial performance and implement effective performance measurement strategies, while improving their business processes. This paper introduces a methodology based on a hybrid multi-criteria decision-making (MCDM) approach, which is designed to assist companies in evaluating the extent to which they have attained their financial performance targets. The propounded decision-making framework employs the Grey entropy technique to ascertain the relative importance of the predetermined criteria, and subsequently, the Grey relational analysis model is utilized to priorities the decision alternatives. The present article employs a case study approach to evaluate the financial performance of a reinsurance company. Our aim is to assist decision-makers in making integrated decisions regarding financial performance and improving sustainability. Grey entropy’s findings show that return on average equity, combined ratio vs return on average assets are the three most important indicators affecting corporate financial performance. According to the Grey relationship analysis results, the best and worst performance years in terms of financial performance were determined as 2020 and 2022, respectively.

Yazarlar

Fuat ÇAMLIBEL

Anahtar Kelimeler

Reinsurance industry, financial performance, Grey entropy, Grey relational analysis

JEL Codes

C69, G22

Yayın Bilgileri

Cilt 4, Sayı 2, 2024 · Sayfa 65-79

DOI: 10.52898/ijif.2024.10

Dosyalar