Vol. 9 No. 2 (2021): Business & Management Studies: An International Journal
Articles

Financial performance analysis of electricity generation companies with multi-criteria decision making: Entropy-based Cocoso method

Ayşe Topal
Asst. Prof. Dr., Niğde Ömer Halisdemir University

Published 2021-06-25

Keywords

  • ÇKKV, CoCoSo, Elektrik Üretim Şirketleri
  • MCDM, CoCoSo, Electricity Generation Companies

How to Cite

Topal, A. (2021). Financial performance analysis of electricity generation companies with multi-criteria decision making: Entropy-based Cocoso method. Business & Management Studies: An International Journal, 9(2), 532-546. https://doi.org/10.15295/bmij.v9i2.1794

Abstract

Energy consumption is increasing rapidly nowadays due to the increasing population and industrialization. To meet these growing energy needs efficiently, Turkey's electricity sector has begun to transform in the early 2000s, and the electricity generation segment has been opened to privatization. With the privatization, many private enterprises entered the electricity sector. Electricity generation companies need to improve their financial performance to adapt to competition in the electricity market. The primary purpose of this study is to apply the multi-criteria decision-making model based on Entropy and CoCoSo methods to evaluate the financial performance of electricity generation companies. For this purpose, the financial performances of 10 electricity generation companies which are the first 40 in terms of installed capacity in Turkey and are included in the Forbes 500 list, are analyzed with Entropy and CoCoSo methods, which are the multi-criteria decision-making techniques. Criterion weights were found by Entropy. The ranking of the electricity generation companies financial performances were made by the CoCoSo method. In this study, net sales, net sales change, profit before interest/tax, change in profit before interest/tax, total assets, equity, exports and number of employees are used. Actual data of 10 energy companies in 2019 taken from the Forbes 500 were used. According to the results, the electricity generation company with the highest financial performance is Enka, and the lowest performance belongs to the Gama Energy company. Various studies in the literature evaluate the financial performance of electricity generation companies using multi-criteria decision-making methods. However, unlike other studies, in this study, the financial performance of electricity generation companies was evaluated using Entropy and CoCoSo methods. In addition, there is no study examining the financial performance of the electricity generation companies from Turkey in the Fortune 500 list in the literature.

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