Application of TOPSIS Analysis Method in Financial Performance Evaluation: A Case Study of Construction Sector in Malaysia

Rahim, Zati Halwani Abd; Fahami, Norasyikin Abdullah; Azhar, Farah Waheeda; Karim, Hilwana Abd; Rahim, Siti Khatijah Nor Abdul

doi:10.24191/abrij.v6i1.9934

Cited by 11 publications

(6 citation statements)

References 3 publications

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“…The Multiple-Criteria Decision Method (MCDM) such as TOPSIS Method is used to assist decision makers for determining which answer is the best in multiple ways. For dealing with financial difficulties, TOPSIS is the most extensively utilised MCDM approach (Abd Rahim et al, 2020). TOPSIS is a practical and helpful approach for employing distance metrics to rank and choose several externally determined options.…”

Section: Topsismentioning

confidence: 99%

A Mcdm-Based Model of Malaysian Commercial Bank Performance Prior to and During Covid-19

Ghazali¹,

Tumiran²,

Rodzi³

2022

IJARAFMS

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This study aims to propose the integrated Analytic Hierarchy Process (AHP) with Technique for Order of Preference by Similarity to the Ideal Solution (TOPSIS), VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR), and Preference Ranking Organization Method for Enrichment Evaluations II (PROMETHEE II) to calculate the performance of commercial banks in Malaysia before and during covid-19. The information was taken from the financial statements of eight commercial banks in Malaysia for the years 2018 through 2021. Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), Liquidity, Total Liabilities, and Total Equity are six selected criteria used to evaluate the overall performance of commercial banks. Malayan Banking Berhad (MBB) had the best performance among Malaysian commercial banks, according to the findings of the research. The AHP-VIKOR and AHP-PROMETHEE II methods demonstrated that Malayan Banking Berhad remained number one for four years. Using the TOPSIS methodology, Malayan Banking Berhad is also ranked first for the years 2020 and 2021. In contrast, Alliance Bank had the worst performance among Malaysian commercial banks. Using the AHP-VIKOR and AHP-PROMETHEE II methods, Alliance Bank's ranking has remained unchanged from 2018 to 2021. In addition, the AHP-TOPSIS method only recorded Alliance Bank in last place for 2018 and 2019. The final trend results for the eight commercial banks in AHP-VIKOR and AHP-PROMETHEE II are virtually identical.

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Section: Topsismentioning

confidence: 99%

A Mcdm-Based Model of Malaysian Commercial Bank Performance Prior to and During Covid-19

Ghazali¹,

Tumiran²,

Rodzi³

2022

IJARAFMS

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“…The TOPSIS model is employed in this study to rank firms in the food sector and is recognized as a robust MCDM approach that yields reliable results with high computational efficiency (Hoe et al, 2020;Lukić et al, 2020). Consequently, numerous studies in the literature have shown considerable interest in utilizing the TOPSIS model to rank alternatives and identify optimal decision alternatives (Abd Rahim et al, 2020;Azhar et al, 2022;Deng et al, 2000;Fahami et al, 2019;Hoe et al, 2018Hoe et al, , 2019Hussain et al, 2020;Mandic et al, 2014;Wanke et al, 2016;Yildiz, 2020). Accurate performance measurement using TOPSIS is advantageous for decision makers as it equips them with valuable information to make well-informed choices.…”

Section: Introductionmentioning

confidence: 99%

Evaluating Financial Performance of Food Service Companies: A TOPSIS-based Approach

Azhar,

Abd Rahim

2024

IJARAFMS

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The food service industry has a significant impact on society and plays a crucial role in expanding economic opportunities. Performance evaluation is essential for this industry in a highly competitive environment to enhance organizational decision-making. This study aims to propose a conceptual framework using the TOPSIS model to evaluate and rank the financial performance of food companies in Malaysia. Key financial ratios such as current ratio, return on equity, profit margin, debt to equity ratio, earnings per share, dividend yield, and price earnings ratio are employed. The study holds significance as it provides a means to assess the financial performance of the food service industry in Malaysia using the proposed conceptual framework and TOPSIS model. The findings of this research highlight that NESTLE emerges as the top-performing company among the studied companies, being the closest to the ideal solution. This paper emphasizes the importance of evaluating, comparing, and ranking the financial statuses of food service companies in Malaysia utilizing the TOPSIS model. The significance of this study lies in its ability to assess the financial performance of the food service industry in Malaysia through the proposed conceptual framework using the TOPSIS model.

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“…The extensive application of the TOPSIS model in solving various MCDM problems has led to a growing number of subsequent studies. Relevant studies that have utilized TOPSIS as a methodology can be found in the works of (Abd Rahim et al, 2020;Deng et al, 2000;Hoe et al, 2018;Hussain et al, 2020;Mandic et al, 2014;Wanke et al, 2016;Yildiz, 2020). Additionally, studies conducted by Azhar et al (2022); Fahami et al (2019); Hoe et al, (2019; have also employed financial ratio analysis using TOPSIS to analyze the performance of the service, healthcare and telecommunications industries within the context of Malaysia.…”

Section: Introductionmentioning

confidence: 99%

Investing in Malaysian Consumer Product Companies Using TOPSIS

Abd Rahim,

Azhar

2024

IJARBSS

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The aim of this study is to evaluate the financial performance of consumer companies in Malaysia using the TOPSIS method, a multi-criteria decision-making approach. Financial data for 13 companies in 2022 were obtained from DataStream. While traditional ratio analysis has been commonly used to assess financial performance over the years, some studies suggest that it may not provide a comprehensive measurement. Therefore, this research employs the TOPSIS method to obtain a more comprehensive result. The TOPSIS approach involves seven steps and utilizes important financial ratios such as Current Ratio, Dividend Yield, Earnings per Share (EPS), Net Profit Margin, Debt Ratio, and Return on Equity (ROE) as criteria for evaluating the financial performance of the companies. The study ranks the 13 consumer companies in Malaysia and provides investment recommendations to investors, aiming to maximize their investment benefits. The findings of this research hold significant value for investors, companies, market participants, and both public and private policymakers, as they can enhance their investment decision-making based on these results.

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Application of TOPSIS Analysis Method in Financial Performance Evaluation: A Case Study of Construction Sector in Malaysia

Cited by 11 publications

References 3 publications

A Mcdm-Based Model of Malaysian Commercial Bank Performance Prior to and During Covid-19

A Mcdm-Based Model of Malaysian Commercial Bank Performance Prior to and During Covid-19

Evaluating Financial Performance of Food Service Companies: A TOPSIS-based Approach

Investing in Malaysian Consumer Product Companies Using TOPSIS

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