Comparison of Financial Performance of the Accommodation Sector with Other Service Sub-Sectors

Abstract

Purpose - The aim of this study is to evaluate the financial performance of the sub-sectors in the services sector through DuPont Analysis and to compare the financial performance of the sub-sectors with that of the accommodation sector. Design/methodology/approach – This study uses data obtained from the year-end financial statements of the sub-sectors of the service sector from 2019 to 2023. The net profit margin, asset turnover, return on assets, return on assets, equity multiplier, and return on equity ratios of each sub-sector were calculated. Based on these findings, the sub-sectors' five-year return on equity ratios are compared with the accommodation sector's five-year return on equity ratios. Finding – The accommodation sector ranked eighth among the service sub-sectors, with an average return on equity of 0.501. Among the sub-sectors, the information and communication sub-sector ranked first with 0.162, the other service activities sub-sector ranked second with 0.087, and the professional, scientific and technical activities sub-sector ranked third with 0.068. The real estate activities sub-sector has a value of 1.527, and the transport and storage sub-sector, with a value of 0.818, are the last three sub-sectors together with the accommodation sector in terms of return on equity. Discussion – The financial performance of the sub-sectors in the service sector has been unstable and fluctuating over the years. They should use their assets more effectively and efficiently to increase their financial performance. While determining their investment strategies, related sectors should conduct investment planning by considering the balance between foreign resources and equity. According to the results obtained in the sector analyses, it is insufficient for the sectors to increase sales only for profitability. Companies should increase their net profits and net profit margins in addition to sales to achieve higher return on equity.