Determination of the Brand Value Using the Hirose Method and Financial Performance Analysis: An Application on Intermediary Institutions Listed in Borsa Istanbul

Abstract

Purpose – The purpose of this study is to measure and compare the brand value and financial performances of capital market intermediary institutions that whose shares are traded on the Borsa Istanbul. Design/methodology/approach – The data used in the study is available on the Capital Markets Association of Turkey (www.tspb.org.tr) and the Public Disclosure Platform (www.kap.org.tr). The Hirose method, which is the most preferred method in the literature for calculating company brand values, and the Gray Relational Analysis (GHI) method, a multi-criteria decision-making method, were used in measuring financial performance. The impact of the financial ratios of the intermediary institutions on the brand values calculated using the Hirose method was ascertained by the regression analysis. The relationships between the brand values calculated using the Hirose method and the GIA financial performance ranking results were analyzed comparatively. Findings – The study has determined that there is a negative correlation between the borrowing rate and brand value. As the net working capital ratio increases, brand value decreases. In this respect, there is a negative correlation between net working capital and brand value. There were negative correlations between the liquidity ratios and brand value. Based on the period data from 2016 to 2020, 29.5 percent of the brand value can be explained with the market value. A meaningful relationship (negative) between the GIA financial performance ranking results and brand values was determined within the context of 2016 data only. GLBMD was found to be the best performing brokerage house for three consecutive years. 2016 GEDIK is the brokerage house with the best performance in the GIA performance ranking results, and the brokerage house with the lowest performance is set as INFO. Discussion – The number of studies on the brand values and financial performances of intermediary institutions that provide brokerage services in capital markets and whose shares are traded on Borsa Istanbul is limited. Analyzes have not identified a meaningful relationship between the financial performance rankings and the brand values, excluding 2016. There is also no meaningful relationship between brand values and market values. The results of the study revealed that the brand values of intermediary institutions whose shares are traded at Borsa Istanbul fell short in announcing financial performance and market values. The study results are believed to guide investment decisions of investors interested in investing in the shares of related institutions.