Comparison analysis for subjective and objective weights of financial positions of container shipping companies

Abstract

This paper explores the positions of financial ratios identified utilizing both subjective and objective weighting methods—the consistent fuzzy preference relation (CFPR) and entropy—based on questionnaires collected from experts and the financial statements of major shipping companies in Taiwan and Korea. The comparison of perceptions of financial ratios by country and by expert group illuminates some financial aspects that experts may have ignored or not paid close attention to during the business operating process, especially in today’s turbulent world shipping market. The major results of this paper show that experts in the two countries have different perceptions of the debt-to-equity ratio and that by combining the results of objective and subjective weights, categorization of financial ratios by quadrant can help decision-makers find business options and strategies to improve the financial performance of their companies. This research approach may be applied to other business entities, improving on the direct rating method used in previous studies.