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Evaluating the Financial Performance of Colombian Companies: A Data Envelopment Analysis Without Explicit Inputs and Technique for Order Preference by Similarity to the Ideal Solution Approach

Author

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  • Adel Mendoza-Mendoza

    (Program of Industrial Engineering, Universidad del Atlántico, Barranquilla 080001, Colombia)

  • Daniel Mendoza Casseres

    (Program of Industrial Engineering, Universidad del Atlántico, Barranquilla 080001, Colombia)

  • Enrique De La Hoz-Domínguez

    (Statistical and Quantitative Methods Research Group (GEMC), Universidad del Magdalena, Santa Marta 470004, Colombia)

Abstract

The evaluation and ranking of companies in any sector are generally based on a single measure of financial success, so the results obtained vary according to the classification criteria used. This study applies a multi-criteria approach to develop a classification of the largest companies in Colombia based on their financial results for the period 2022–2023. An analysis of 100 companies was conducted, utilizing four critical criteria: operating income, net profit, total assets, and equity. The evaluation followed a two-stage process. In the first stage, the weights or importance of each selected criterion were objectively established using data envelopment analysis without explicit inputs (DEA-WEIs). This approach reveals that operating income (35.23%) and total assets (28.57%) are the most influential criteria, while net profit is the least influential (13.51%). In the second stage, companies are ranked using the Technique for Order Preference by Similarity to the Ideal Solution (TOPSIS), with the results highlighting Refinería de Cartagena, Empresas Públicas de Medellín, and Terpel S.A. as the top-performing companies. The classification shows clear differentiation, forming two statistically distinct groups validated through discriminant analysis, achieving a 100% correct classification rate. These findings provide actionable insights for benchmarking and improving financial performance in the corporate sector.

Suggested Citation

  • Adel Mendoza-Mendoza & Daniel Mendoza Casseres & Enrique De La Hoz-Domínguez, 2024. "Evaluating the Financial Performance of Colombian Companies: A Data Envelopment Analysis Without Explicit Inputs and Technique for Order Preference by Similarity to the Ideal Solution Approach," JRFM, MDPI, vol. 17(12), pages 1-14, December.
  • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:12:p:568-:d:1546178
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    References listed on IDEAS

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    1. Mehdi Toloo & Madjid Tavana, 2017. "A novel method for selecting a single efficient unit in data envelopment analysis without explicit inputs/outputs," Annals of Operations Research, Springer, vol. 253(1), pages 657-681, June.
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