Financial Performance Assessment by a Type‐2 Fuzzy Logic Approach

Abstract

Any company must constantly innovate if they want to maintain its market share in the present cutthroat and unstable industry. Innovation has a big influence on consumer behavior, yet it goes against the principles of sustainability. The issue of sustainability has become crucial to their company’s growth. In order to evaluate a business firm’s sustainability performance statistically, a new and effective fuzzy logic tool is created. Evolution and assessment are performed by a novel interval type‐2 fuzzy logic inference system. The judgment of the inference system is carried out on the basis of type‐2 fuzzy logic (T2FL), principal component analysis (PCA), and statistical data analysis. The main input variables include corporate environmental performance (CEP) and corporate financial performance (CFP). The suggested approach can effectively examine a corporation’s sustainable performance, according to experimental findings. A unique approach that makes use of language variables and if‐then logic to assist quantitative business sustainability events is the link between CEP and CFP. The recommended test will provide senior administrative leaders with useful information to supervise natural concerns correctly and gauge their commitment to company success.