Financial Performance Analysis with Reference Ideal Method: An Application on BIST Insurance Companies
Abstract
Multi-Criteria Decision Making (MCDM) methods are used in performance evaluation studies based on financial ratios. Reference Ideal Method (RIM) is a newly developed MCDM method. The method differs from the other MCDM methods in that it uses the ideal range or point for the criteria. There are ideal ranges recommended for some financial ratios. This makes RIM a suitable method for performance evaluation using financial ratios. Therefore, a performance evaluation based on financial ratios using RIM was conducted in this study and the appropriateness of using RIM in this area was examined. As a result of the study, it is found that RIM is a suitable method for performance evaluation based on financial ratios. However, decision makers should be careful when setting the ideal range.
Keywords
References
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