Evaluation of the financial performance of the textile and apparel industry in interval type-2 fuzzy environment

Abstract

The Turkish textile and apparel sector plays a crucial role in the national economy through employment, exports, and investment. The financial performance of companies is a key determinant of their sustainability and competitiveness, especially in global markets. The Turkish textile and apparel sector is one of the essential industries in terms of macro-economic indicators such as net foreign exchange inflow, employment and investment. This sector is also one of the critical actors in world trade. A robust performance evaluation model is essential for stakeholders such as investors, creditors, and managers. However, the assessment of firms is a very critical decision involving uncertainty due to various conflicting criteria based on judgements. In this study, an integrated multi-criteria decision-making (MCDM) model including interval type-2 fuzzy hierarchy process (IT2FAHP) and Compromise Ranking of Alternatives from Distance to Ideal Solution (CRADIS) approaches are proposed to assess the financial performance of Turkish textile and clothing firms that are traded in Borsa ˙ Istanbul (B˙ IST) in the period from 2006 to 2020. In line with the determined purpose, the arithmetic average of the determined financial ratios during the analysis period covering 15 years is computed to obtain long-term performance indicators. The importance weights of the selected financial criteria for the performance evaluation model are identified by employing the IT2FAHP approach. Then, the firms are ranked according to their financial performances with the CRADIS method. In addition, the results from the sensitivity analysis validate the proposed approach and prove that it is practical. Moreover, practical and managerial implications are discussed based on the results. The results offer valuable insights for strategic decision-making and can support efforts to enhance financial stability in the textile and apparel sector. According to the results, "LUKSK" had the highest long-term financial performance among the 11 companies discussed. This company is followed by BOSSA, YATAS, and ATEKS companies. The alternatives confirm the robustness of the proposed model in maintaining its place in the ranking in 190 scenarios. In addition, the comparative analysis confirms the consistency of the proposed ranking framework.