Have a personal or library account? Click to login
Best proxy to determine firm performance using financial ratios: A CHAID approach Cover

Best proxy to determine firm performance using financial ratios: A CHAID approach

Open Access
|Sep 2022

References

  1. ABDEL-BASSET, M., DING, W., MOHAMED, R., & METAWA, N. (2020). An integrated plithogenic MCDM approach for financial performance evaluation of manufacturing industries. Risk Management, 22(3), 192–218. https://doi.org/10.1057/s41283-020-00061-410.1057/s41283-020-00061-4
  2. ABDI, H, & BEATON, D. (2021). Principal component and correspondence analyses using R. Springer International Publishing.
  3. ABDI, HERVÉ, & WILLIAMS, L. J. (2010). Principal component analysis. Wiley Interdisciplinary Reviews: Computational Statistics, 2(4), 433–459. https://doi.org/10.1002/wics.10110.1002/wics.101
  4. AKGÜN, A. İ., & MEMIŞ KARATAŞ, A. (2020). Investigating the relationship between working capital management and business performance: evidence from the 2008 financial crisis of EU-28. International Journal of Managerial Finance. https://doi.org/10.1108/IJMF-08-2019-029410.1108/IJMF-08-2019-0294
  5. AL-ZARAREE, A., AL-SAWALHAH, J., & SAMARA, A. (2021). The relationship between the return on equity (ROE) and the capital structure of the Jordanian public shareholding industrial companies. Academy of Accounting and Financial Studies Journal, 25(1), 1–10.
  6. ALMASKATI, N. (2022). The determinants of bank profitability and risk: A random forest approach. Cogent Economics & Finance, 10(1), 2021479. https://doi.org/10.1080/23322039.2021.202147910.1080/23322039.2021.2021479
  7. AZUR, M. J., STUART, E. A., FRANGAKIS, C., & LEAF, P. J. (2011). Multiple imputation by chained equations: what is it and how does it work? Wiley Online Library, 20(1), 40-49. https://doi.org/https://doi.org/10.1002/mpr.32910.1002/mpr.329
  8. Bawazir, H., Khayati, A., & AbdulMajeed, F. (2021). Corporate governance and the performance of non-financial firms: the case of Oman. Entrepreneurship and Sustainability Issues, 8(4), 595–609. https://doi.org/10.9770/jesi.2021.8.4(36)10.9770/jesi.2021.8.4(36)
  9. BAYRAKTAROGLU, A. E., CALISIR, F., & BASKAK, M. (2019). Intellectual capital and firm performance: an extended VAIC model. Journal of Intellectual Capital, 20(3), 406–425. https://doi.org/10.1108/JIC-12-2017-018410.1108/JIC-12-2017-0184
  10. BISNODE, 2021; Bisnode Albertina, https://www.bisnode.cz/produkty/albertina/. Gold Edition
  11. BLAŽKOVÁ, I., & DVOULETÝ, O. (2022). Relationship between firm total factor productivity and performance: case of the Czech high-tech industry. International Journal of Entrepreneurial Venturing.10.1504/IJEV.2022.10047629
  12. BOSE, I. (2006). Deciding the financial health of dot-coms using rough sets. Information & Management, 43(7), 835-846.10.1016/j.im.2006.08.001
  13. CAMSKA, D., KLECKA, J., & SCHOLLEOVA, H. (2021). Influence of age on selected parameters of insolvent companies. Problems and Perspectives in Management, 19(2), 77–90. https://doi.org/10.21511/ppm.19(2).2021.0710.21511/ppm.19(2).2021.07
  14. CHANDRAPALA, P., & KNÁPKOVÁ, A. (2013). Firm-specific factors and financial performance of firms in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 61(7), 2183–2190. https://doi.org/10.11118/actaun20136107218310.11118/actaun201361072183
  15. CHICCO, D., TÖTSCH, N., & JURMAN, G. (2021). The Matthews correlation coefficient (MCC) is more reliable than balanced accuracy, bookmaker informedness, and markedness in two-class confusion matrix evaluation. BioData Mining, 14(1), 13. https://doi.org/10.1186/s13040-021-00244-z10.1186/s13040-021-00244-z
  16. ČINČALOVÁ, S., & HEDIJA, V. (2020). Firm characteristics and corporate social responsibility: the case of Czech transportation and storage industry. Sustainability, 12(5), 1992. https://doi.org/10.3390/su1205199210.3390/su12051992
  17. DELEN, D., KUZEY, C., & UYAR, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert Systems with Applications, 40(10), 3970–3983. https://doi.org/10.1016/j.eswa.2013.01.01210.1016/j.eswa.2013.01.012
  18. DÍAZ-PÉREZ, F. M., & BETHENCOURT-CEJAS, M. (2016). CHAID algorithm as an appropriate analytical method for tourism market segmentation. Journal of Destination Marketing and Management, 5(3), 275–282. https://doi.org/10.1016/j.jdmm.2016.01.00610.1016/j.jdmm.2016.01.006
  19. DUNTEMAN, G. H. (1989). Sage university paper series on quantitative applications in social sciences. Principal components analysis, Newbury Park, CA: Sage.
  20. DWILITA, H., & MINGKA, A. Y. (2022). The effect of Nim, Npl, firm size and exchange rate on profitability with car as an intervening variable in the company conventional banking sector registered in Indonesia stock exchange 2015-2019 period. Accounting and Business Journal, 4(1), 28–37. https://doi.org/10.54248/ABJ.V4I1.4052
  21. FIELD, A. P. (2005). Intraclass Correlation. Encyclopedia of Statistics in Behavioral Science. Chichester, UK: John Wiley & Sons, Ltd. https://doi.org/10.1002/0470013192.bsa31310.1002/0470013192.bsa313
  22. GAYATHRI, C. S., & VIJAYALAKSHMI, S. (2021). A study on the effect of cost of capital on profitability of a company. International Research Journal on Advanced Science Hub, 3(0), 54–59. https://doi.org/10.47392/IRJASH.2021.16510.47392/irjash.2021.165
  23. HABIBI, A. & IQBAL, M. (2021). Benefits of financial ratios for financing sharia banking Indonesia. Jurnal Ekonomi Dan Keuangan Syariah, 5(1), 1–12. https://doi.org/10.29313/amwaluna.v5i1.529910.29313/amwaluna.v5i1.5299
  24. Harman, H. H. (1976). Modern Factor Analysis. University of Chicago Press.
  25. HUA, Z., WANG, Y., XU, X., ZHANG, B., & LIANG, L. (2007). Predicting corporate financial distress based on integration of support vector machine and logistic regression. Expert Systems with Applications, 33(2), 434-440.10.1016/j.eswa.2006.05.006
  26. HUSSON, F., LÊ, S., & PAGÈS, J. (2017). Exploratory multivariate analysis by example using R. Routledge New York, NY.10.1201/b21874
  27. ISLAMIYATI, G. M., & DIANA, N. (2021). Effect of Mudarabah and Musharakah financing on return on equity (ROE) case studies on Islamic commercial banks in Indonesia for the period 2015-2019. Jurnal Ekonomi Syariah Teori Dan Terapan, 8(3), 255–263. https://doi.org/10.20473/VOL8ISS20213PP255-26310.20473/vol8iss20213pp255-263
  28. JOHNSON, R. A. & WICHERN, D. W. (2013). Applied Multivariate Statistics analysis (6th ed.). New Jersy: Pearson Education Inc.
  29. JYOTI, G., & KHANNA, A. (2021). Does sustainability perforcmance impact financial performance? Evidence from Indian service sector firms. Sustainable Development, 29(6), 1086-1095. https://doi.org/10.1002/sd.220410.1002/sd.2204
  30. KAISER, H. F. (1974). An index of factorial simplicity. Psychometrika, 39(1), 31–36. https://doi.org/10.1007/BF0229157510.1007/BF02291575
  31. KASS, G. V. (1980). An exploratory technique for investigating large quantities of categorical data. Applied Statistics, 29(2), 119. https://doi.org/10.2307/298629610.2307/2986296
  32. KAYANI, U. N., DE SILVA, T. A., & GAN, C. (2020). Working capital management and firm performance relationship: An empirical investigation of Australasian firms. Review of Pacific Basin Financial Markets and Policies, 23(3). https://doi.org/10.1142/S021909152050026510.1142/S0219091520500265
  33. KORENIUS, T., LAURIKKALA, J., & JUHOLA, M. (2007). On principal component analysis, cosine and Euclidean measures in information retrieval. Information Sciences, 177(22), 4893–4905. https://doi.org/10.1016/j.ins.2007.05.02710.1016/j.ins.2007.05.027
  34. KUČERA, J., VOCHOZKA, M., & ROWLAND, Z. (2021). The ideal debt ratio of an agricultural enterprise. Sustainability (Switzerland), 13(9). https://doi.org/10.3390/su1309461310.3390/su13094613
  35. LARASATI, C. I., & PURWANTO, P. (2022). How financial ratios and firm size affect profitability: evidence from food and beverages industry in Indonesia. The Winners, 23(1), 43–50. https://doi.org/10.21512/TW.V23I1.709910.21512/tw.v23i1.7099
  36. LÊ, S., JOSSE, J., & HUSSON, F. (2008). FactoMineR: An R package for multivariate analysis. Journal of Statistical Software, 25(1), 1–18. https://doi.org/10.18637/jss.v025.i0110.18637/jss.v025.i01
  37. LISTIORINI, L., & PUTRI, R. A. (2022). The effect of leverage, return on asset (ROA), and company size on company value with good corporate governance as moderating variables (study on Manufacturing Companies). Accounting and Business Journal, 4(1), 38–49. https://doi.org/10.54248/ABJ.V4I1.4053
  38. LUBIS, I., & ALFIYAH, F. N. (2021). Effect of return on equity and debt to equity ratio to stock return. Indonesian Financial Review, 1(1), 18–32. https://doi.org/10.55538/ifr.v1i1.310.55538/ifr.v1i1.3
  39. MILLER, B., FRIDLINE, M., LIU, P. Y., & MARINO, D. (2014). Use of CHAID Decision Trees to formulate pathways for the early detection of metabolic syndrome in young adults. Computational and Mathematical Methods in Medicine.10.1155/2014/242717
  40. NILASHI, M., BAGHERIFARD, K., RAHMANI, M., & RAFE, V. (2017). A recommender system for tourism industry using cluster ensemble and prediction machine learning techniques. Computers and Industrial Engineering, 109, 357–368. https://doi.org/10.1016/j.cie.2017.05.01610.1016/j.cie.2017.05.016
  41. PIVOŇKOVÁ, A., & TEPPEROVÁ, J. (2021). Interest limitation rule under ATAD: case of the Czech Republic. DANUBE, 12(2), 121–134. https://doi.org/10.2478/DANB-2021-000910.2478/danb-2021-0009
  42. REZAIE, K., RAMIYANI, S. S., NAZARI-SHIRKOUHI, S., & BADIZADEH, A. (2014). Evaluating performance of Iranian cement firms using an integrated fuzzy AHPVIKOR method. Applied Mathematical Modelling, 38(21–22), 5033–5046. https://doi.org/10.1016/j.apm.2014.04.00310.1016/j.apm.2014.04.003
  43. SEAN, N. A. M., ANAGREH, S., AL-DALAIEN, B. O. A., ALMUGARI, F., KHALED, A. S. D., & AL-HOMAIDI, E. A. (2021). Working capital management and banks’ performance: Evidence from India. The Journal of Asian Finance, Economics and Business, 8(6), 747–758. https://doi.org/10.13106/JAFEB.2021.VOL8.NO6.0747
  44. SHARMA, R. K., BAKSHI, A., & CHHABRA, S. (2020). Determinants of behaviour of working capital requirements of BSE listed companies: An empirical study using co-integration techniques and generalised method of moments. Cogent Economics & Finance, 8(1), 1720893. https://doi.org/10.1080/23322039.2020.172089310.1080/23322039.2020.1720893
  45. SOEWARNO, N., & TJAHJADI, B. (2020). Measures that matter: an empirical investigation of intellectual capital and financial performance of banking firms in Indonesia. Journal of Intellectual Capital, 21(6), 1085–1106. https://doi.org/10.1108/JIC-09-2019-022510.1108/JIC-09-2019-0225
  46. THARWAT, A. (2018). Classification assessment methods. Applied Computing and Informatics. https://doi.org/10.1016/j.aci.2018.08.00310.1016/j.aci.2018.08.003
  47. TRACY, A. (2012). Ratio analysis fundamentals: how 17 financial ratios can allow you to analyse any business on the planet. CreateSpace Independent Publishing Platform.
  48. VALASKOVA, K., KLIESTIK, T., & KOVACOVA, M. (2018). Management of financial risks in Slovak enterprises using regression analysis. Oeconomia Copernicana, 9(1), 105–121. https://doi.org/10.24136/oc.2018.00610.24136/oc.2018.006
  49. VAN BUUREN, S., & GROOTHUIS-OUDSHOORN, K. (2011). mice: Multivariate imputation by chained equations in R. Journal of Statistical Software, 45(3), 1–67. https://doi.org/10.18637/jss.v045.i0310.18637/jss.v045.i03
  50. VRBKA, J. (2020). The use of neural networks to determine value based drivers for SMEs operating in the rural areas of the Czech Republic. Oeconomia Copernicana, 11(2), 325–346. https://doi.org/10.24136/OC.2020.01410.24136/oc.2020.014
  51. VRBKA, J., KALINOVÁ, E., & DVOŘÁKOVÁ, Z. (2022). Optimization of the capital structure of an agricultural company in the Czech Republic. SHS Web of Conferences, 132, 1008. https://doi.org/10.1051/SHSCONF/20221320100810.1051/shsconf/202213201008
  52. WANG, T. C., & CHEN, Y. H. (2006). Applying rough sets theory to corporate credit ratings. In 2006 IEEE International Conference on Service Operations and Logistics, and Informatics (pp. 132-136). IEEE. https://doi.org/10.1109/SOLI.2006.32905010.1109/SOLI.2006.329050
  53. WITTEN, I. H., & FRANK, E. (2000). Machine Learning Algorithms in Java. Machine Learning, 265–320.
  54. XU, J., & LI, J. (2020). The interrelationship between intellectual capital and firm performance: evidence from China’s manufacturing sector. Journal of Intellectual Capital. https://doi.org/10.1108/JIC-08-2019-0189/FULL/HTML10.1108/JIC-08-2019-0189
  55. YALCIN, N., BAYRAKDAROGLU, A., & KAHRAMAN, C. (2012). Application of fuzzy multi-criteria decision making methods for financial performance evaluation of Turkish manufacturing industries. Expert Systems with Applications, 39(1), 350-364. https://doi.org/10.1016/j.eswa.2011.07.02410.1016/j.eswa.2011.07.024
  56. YOUSAF, M. (2022a). Bankruptcy risks, firm size, and firm profitability: A dynamic panel data approach. International Journal of Sustainable Economy. https://doi:10.1504/IJSE.2023.1004580510.1504/IJSE.2023.10045805
  57. YOUSAF, M. (2022b). Labour productivity and firm performance: evidence from certified firms from the EFQM Excellence Model. Total Quality Management and Business Excellence. https://doi.org/10.1080/14783363.2022.205431910.1080/14783363.2022.2054319
  58. YOUSAF, M. (2021). Intellectual capital and firm performance: evidence from certified firms from the EFQM Excellence Model. Total Quality Management and Business Excellence. https://doi.org/10.1080/14783363.2021.197280010.1080/14783363.2021.1972800
  59. YOUSAF, M., & BRIS, P. (2021a). Assessment of bankruptcy risks in Czech companies using regression analysis. Problems and Perspectives in Management, 19(3), 46–55. https://doi.org/10.21511/PPM.19(3).2021.0510.21511/ppm.19(3).2021.05
  60. YOUSAF, M., & BRIS, P. (2021b). Effects of working capital management on firm performance: evidence from the EFQM certified firms. Cogent Economics and Finance, 9(1). https://doi.org/10.1080/23322039.2021.195850410.1080/23322039.2021.1958504
  61. YOUSAF, M., BRIS, P., & HAIDER, I. (2021). Working capital management and firm’s profitability: Evidence from Czech certified firms from the EFQM excellence model. Cogent Economics and Finance, 9(1). https://doi.org/10.1080/23322039.2021.195431810.1080/23322039.2021.1954318
  62. ZAINI, B. J., & MAHMUDDIN, M. (2019). Classifying firms’ performance using data mining approaches. International Journal Supply Chain Management, 8(1), 690.
  63. ZUARDI, M. H. (2021). Measuring healthiness of islamic banks using solvabilitas financial ratios. International Journal of Islamic Economics, 3(1), 17–36. https://doi.org/10.32332/IJIE.V3I1.327910.32332/ijie.v3i1.3279
DOI: https://doi.org/10.2478/revecp-2022-0010 | Journal eISSN: 1804-1663 | Journal ISSN: 1213-2446
Language: English
Page range: 219 - 239
Submitted on: Mar 24, 2022
Accepted on: Jul 26, 2022
Published on: Sep 27, 2022
Published by: Mendel University in Brno
In partnership with: Paradigm Publishing Services
Publication frequency: 2 issues per year

© 2022 Muhammad Yousaf, Sandeep Kumar Dey, published by Mendel University in Brno
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.