Assessing Financial Health with Piotroski F-Score and CRITIC-Based COPRAS: Evidence from BIST

Abstract

Purpose – This study integrates financial ratio analyses with decision-making techniques to evaluate the financial performance of companies. By enhancing the accuracy of financial decision-making processes, this approach allows for a deeper understanding beyond mere numbers. The primary objective is to determine the financial health of four companies (AGROT, IZINV, OZSUB, YAPRK) in the Agriculture, Forestry, and Fishing sector listed on Borsa Istanbul (BIST) using the Piotroski F-Score. Consequently, the financial performance scores and rankings of these companies were determined using the CRITIC-based COPRAS method, and the relationships between the F-Score and financial performance rankings were analyzed. The COPRAS method was utilized for its ability to normalize various criteria on a common scale, facilitate comparisons and incorporating decision-makers' preferences into the process. The results indicate that the combined use of the F-Score and CRITIC-based COPRAS methods provides valuable insights for future research and practical applications in capital markets. This study aims to fill a significant gap in the literature by combining the Piotroski F-Score with multi-criteria decision-making methods. Design/methodology/approach – The financial performance of agricultural companies listed on Borsa Istanbul (BIST) was evaluated using the Piotroski F-Score, CRITIC, and COPRAS methods. The Piotroski F-Score assesses the financial health and return potential of companies. The CRITIC method contributes to the decision-making process by providing objectivity in criteria weighting. The COPRAS method evaluates criterion weights and alternative performance to rank the options. The combination of these methods allows for a comprehensive analysis of financial performance and more accurate investment decisions. Findings – The financial health of the four companies examined through Piotroski F-Score, CRITIC, and COPRAS analyses is as follows. AGROT exhibited strong financial performance in 2021 and 2022, but experienced a significant decline in 2023. IZINV showed mediocre performance in 2021 and 2022, with a slight improvement in 2023. OZSUB was strong in 2021, but declined to a mediocre level in 2022 and fell to a weak position in 2023. YAPRK demonstrated strong performance in 2021 and 2022, maintaining a mediocre position in 2023. In the overall performance ranking, YAPRK ranked first, AGROT second, OZSUB third, and IZINV last. Discussion – This study examines the performance of four companies listed on BIST from 2020 to 2023 using Piotroski F-Score, CRITIC, and COPRAS methods, evaluating their financial health and operational efficiency in a comparative manner. The results show that the F-Score and COPRAS methods are consistent, highlighting the variability of companies' financial health over time and the importance of regular monitoring. The study encourages the use of multi-criteria decision-making methods in financial analyses and underscores the need for more comprehensive analyses in the sector. This approach offers an innovative perspective to decision-making processes.