Financial Performance Evaluation of Turkish Energy Companies with Fuzzy AHP and Fuzzy TOPSIS Methods

Abstract

(ProQuest: ... denotes formulae omitted.)1.IntroductionEnergy is one of the most important parts of economic and social development. In addition, it is indispensable and non-substitutable in numerous fields of daily life. The importance of energy is increasing day by day in consequence of rapid development in technology, population growth and increase in life standards in the public life. Net growth of the consumption of energy is actualized by developing economies. Turkey has an increasing population with its developing economy. It performs transformation from agriculture to industry in contrast to developed economies and it also takes part in the most rapid developing energy markets. While the global energy needs which increases with the amount of %2 in a year, it is at %6-%8 level that 3-4 times more than world average energy need in Turkey (dogaka.gov.tr). From this point, in developing economies like Turkey, energy sectors have important structural links with other sectors of economy. Following the developments of these sectors which provide substantially input to other sector of economy is quite important. Profitability which is one of the main purposes of firms has more importance in competitive business environment. It is the fact that the high performing firms will exist in this competition environment. The performance of these firms will be important not only for their subsistence but also for investors, creditors and economy of the country.In this sense, it is inevitable to evaluate the performances of the energy firms. Financial ratios are widely used for evaluating a firm's performance and financial situation. The performance evaluation of a firm helps investors to make investment decisions as well as gives information about the firms. In the literature, researchers have used various multi-criteria decision making models (MCDM) for the performance evaluation in different sectors. For instance, Feng and Wang (2000); Wang (2008) carried out TOPSIS and Fuzzy TOPSIS methods for the performance evaluation in aviation, Yurdakul and ic (2003) used TOPSIS method in automotive sectors respectively. Chou and Liang (2001) used AHP in shipping, Xia and Wu (2007); Chamodrakas and Martakos (2010) utilized AHP and Fuzzy AHP for supplier selection respectively. Also Yalcin, Bayraktaroglu and Kahraman (2012) used Fuzzy AHP, VIKOR and TOPSIS methods in manufacturing sector. Fuzzy AHP and TOPSIS are carried out in performance evaluation of airports (Chang, Cheng & Wang, 2003); cement firms (Ertugrul & Karakasoglu, 2009) and banks (Mandic, Delibasic, Knezevic & Benkovic, 2014; Mahrooz, Maedeh & Morteza, 2013; Secme, Bayraktaroglu & Kahraman, 2009). Fuzzy AHP (Weifeng & Huihuan, 2008) and Fuzzy TOPSIS methods are also used in banking (Akkoc & Vatansever, 2013). Sun (2010) also utilized Fuzzy AHP and Fuzzy TOPSIS methods for computer companies. Kalogeras, Baourakis, Zopounidis and Van Dijk (2005) employed PROMETHEE for food firms. Ignatius, Behzadian, Malekan and Lalitha (2012) used PROMETHEE II for the performance evaluation of the automotive firms. Erginel and Senturk (2011) carried out Fuzzy ANP for the ranking of GSM operators. For the energy firms Ergul (2010) and Sakarya, Yildirim and Akku§ (2015) used TOPSIS method.As it is seen there are few studies in the literature that Fuzzy AHP and Fuzzy TOPSIS methods are integrated for the performance evaluation of energy firms. In the study, we evaluate the financial performances of energy firms for the period of 2008-2013 with utilizing the Fuzzy AHP and Fuzzy TOPSIS methods. The weights of the criteria are determined by Fuzzy AHP method and then Fuzzy TOPSIS method is used for the rankings of the energy firms. Traditional multi-criteria decision making methods are not used in this study, due to the fact that they are insufficient under uncertainty. After 2008 global crisis, the uncertainty has increased all over the world hence the usage of fuzzy methods can provide better results under these conditions. …