scholarly journals Comparison of the Results of a Data Envelopment Analysis Model and Logit Model in Assessing Business Financial Health

Information ◽  
2020 ◽  
Vol 11 (3) ◽  
pp. 160
Author(s):  
Jarmila Horváthová ◽  
Martina Mokrišová
Keyword(s):  
Data Envelopment Analysis ◽  
Logit Model ◽  
Estimation Accuracy ◽  
Data Envelopment Analysis Model ◽  
Type I ◽  
Data Envelopment ◽  
Financial Health ◽  
Error Type ◽  
Suitable Alternative ◽  
Dea Model

This paper focuses on business financial health evaluation with the use of selected mathematical and statistical methods. The issue of financial health assessment and prediction of business failure is a widely discussed topic across various industries in Slovakia and abroad. The aim of this paper was to formulate a data envelopment analysis (DEA) model and to verify the estimation accuracy of this model in comparison with the logit model. The research was carried out on a sample of companies operating in the field of heat supply in Slovakia. For this sample of businesses, we selected appropriate financial indicators as determinants of bankruptcy. The indicators were selected using related empirical studies, a univariate logit model, and a correlation matrix. In this paper, we applied two main models: the BCC DEA model, processed in DEAFrontier software; and the logit model, processed in Statistica software. We compared the estimation accuracy of the constructed models using error type I and error type II. The main conclusion of the paper is that the DEA method is a suitable alternative in assessing the financial health of businesses from the analyzed sample. In contrast to the logit model, the results of this method are independent of any assumptions.

scholarly journals Bankruptcy Prediction with the Use of Data Envelopment Analysis: An Empirical Study of Slovak Businesses

2020 ◽  
Vol 13 (9) ◽  
pp. 212 ◽  
Author(s):  
Róbert Štefko ◽  
Jarmila Horváthová ◽  
Martina Mokrišová
Keyword(s):  
Data Envelopment Analysis ◽  
Logit Model ◽  
Prediction Models ◽  
Bankruptcy Prediction ◽  
Estimation Accuracy ◽  
Data Envelopment ◽  
Financial Indicators ◽  
Suitable Alternative ◽  
Financial Difficulties ◽  
Dea Method

The paper deals with methods of predicting bankruptcy of a business with the aim of choosing a prediction method which will have exact results. Existing bankruptcy prediction models are a suitable tool for predicting the financial difficulties of businesses. However, such tools are based on strictly defined financial indicators. Therefore, the Data Envelopment Analysis (DEA) method has been applied, as it allows for the free choice of financial indicators. The research sample consisted of 343 businesses active in the heating industry in Slovakia. Analysed businesses have a significant relatively stable position in the given industry. The research was based on several studies which also used the DEA method to predict future financial difficulties and bankruptcies of studied businesses. The estimation accuracy of the Additive DEA model (ADD model) was compared with the Logit model to determine the reliability of the DEA method. Also, an optimal cut-off point for the ADD model and Logit model was determined. The main conclusion is that the DEA method is a suitable alternative for predicting the failure of the analysed sample of businesses. In contrast to the Logit model, its results are independent of any assumptions. The paper identified the key indicators of the future success of businesses in the analysed sample. These results can help businesses to improve their financial health and competitiveness.

scholarly journals Measuring Operational Efficiency of Foreign Branches of Bangladeshi Banks as Financial Intermediary

2020 ◽  
Vol 15 (2) ◽  
pp. 165
Author(s):  
Asmina Akter
Keyword(s):  
Data Envelopment Analysis ◽  
Operational Efficiency ◽  
Parent Company ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Analysis Model ◽  
Financial Intermediary ◽  
Intermediary Organization ◽  
Dea Model

In this study an Output-oriented DEA (Data Envelopment Analysis) model is used to measure operational efficiency of foreign branches of Bangladeshi banks as financial intermediary organization for borrowing funds from savers and lending those funds to others for making profit. Among 58 Bangladeshi banks there are only three Bangladeshi banks which have in total seven foreign branches in different foreign locations. A branch of bank can’t be separated legally from its parent company and supervised by its home authorities as part of supervision of the banking group as a whole. By employing DEA model and using “Financial Intermediary Approach” this study found that as a financial intermediary organization between savers and borrowers these foreign branches of Bangladeshi banks are performing efficiently over the years. Among three banks Janata Bank Limited and AB Bank limited are performing most efficiently and Sonali Bank Limited is performing less efficiently relative to two other banks in operating their foreign branches as a financial intermediary organization for borrowing funds from savers and lending those funds to others for making profit.

Evaluating Taiwanese Bank Efficiency Using the Two-Stage Range DEA Model

2016 ◽  
Vol 16 (04) ◽  
pp. 1043-1068 ◽  
Author(s):  
Wei-Hsin Kong ◽  
Tsu-Tan Fu ◽  
Ming-Miin Yu
Keyword(s):  
Data Envelopment Analysis ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Undesirable Outputs ◽  
Analysis Model ◽  
Negative Data ◽  
Two Stage ◽  
Data Set ◽  
Dea Model ◽  
Domestic Banks

This paper develops a range directional distance data envelopment analysis (DEA) model to simultaneously deal with the problems of negative data and undesirable outputs in the study of performance measurement with two-stage DEA. We report on the development of this model to handle both positive and negative data in a DEA framework and accommodate the problem of undesirable intermediate outputs in the first stage of operational processes. Unlike previous two-stage DEA models we allow for a nonuniform abatement factor imposing on stage 1’ production technology. Such a model is then applied to evaluate Taiwanese bank efficiencies both at the operational stage and profitability stage in banking activities based on a data set consisting of 35 domestic banks in Taiwan in the period 2007. The results indicate that, by the range directional two-stage data envelopment analysis model, the operational efficiency was smaller than the profitability efficiency. Many banks generated too many performing loans in which independent banks should reduce more performing loans than financial holding company subsidiary banks. Both the ratio of investments to loans and the ratio of nonperforming loans to performing loans did not have significant contributions to the efficiency. This paper is able to provide information for bank operators and researchers on the managerial and strategic implications of how negative data and undesirable outputs affect efficiency and how to measure efficiency appropriately.

Energy management in crop production using a novel fuzzy data envelopment analysis model

2018 ◽  
Vol 52 (2) ◽  
pp. 595-617 ◽  
Author(s):  
Mohammad Izadikhah ◽  
Alireza Khoshroo
Keyword(s):  
Data Envelopment Analysis ◽  
Crop Production ◽  
Fuzzy Variable ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Analysis Model ◽  
Dea Model ◽  
Model Based ◽  
Smoke Pollution ◽  
Fuzzy Dea

Data envelopment analysis is a relatively “data oriented” approach to measure the efficiency of a set of decision making units which transform multiple inputs into multiple outputs. However, some production processes may generate undesirable outputs like smoke pollution or waste. On the other hand, in many situations, such as a manufacturing system, a production process or a service system, inputs and outputs can be considered as a fuzzy variable. Thus, this paper has presented a new non-radial DEA model based on a modification of Enhanced Russell Model (ERM model) in the presence of an undesirable output in a fuzzy environment. Hereafter, a method for solving the proposed fuzzy DEA model based on the concept of alpha cut and possibility approach is presented. A useful stochastic closeness coefficient is also proposed to present a complete ranking. The proposed methodology is applied to evaluate the efficiencies of barley production farms in 22 provinces in Iran.

Generalized Fuzzy Sample DEA Model and its Application in the Evaluation of Projects

2011 ◽  
Vol 63-64 ◽  
pp. 407-411
Author(s):  
Ren Mu ◽  
Zhan Xin Ma ◽  
Wei Cui ◽  
Yun Morigen Wu
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Input Output ◽  
Output Data ◽  
Dea Model ◽  
Decision Making Unit ◽  
Fuzzy Input ◽  
Fuzzy Dea

Evaluating the performance of activities or organizations by traditional data envelopment analysis model requires crisp input/output data. However, in real-world problems inputs and outputs are often with some fuzziness. To evaluate DMU with fuzzy input/output data, researchers provided fuzzy data envelopment analysis (FDEA) model and proposed related evaluating method. But up to now, we still cannot evaluate a fuzzy sample decision making unit (SDMU) for FDEA model. So this paper proposes a generalized fuzzy DEA model which can evaluate a sample decision making unit and a numerical experiment is used to illustrate this model.

scholarly journals MEASURING EFFICIENCY OF A UNIVERSITY FACULTY USING A HIERARCHICAL NETWORK DATA ENVELOPMENT ANALYSIS MODEL

2018 ◽  
Author(s):  
Rosmaini Kashim ◽  
Maznah Mat Kasim ◽  
Rosshairy Abd Rahman
Keyword(s):  
Data Envelopment Analysis ◽  
Measurement Model ◽  
Data Envelopment Analysis Model ◽  
Network Data ◽  
University Faculty ◽  
Data Envelopment ◽  
Analysis Model ◽  
Dea Model ◽  
Network Data Envelopment Analysis ◽  
The Impact

An efficiency measurement model of a university faculty is proposed with additional new sub-functions that produce new output variables, based on the network Data Envelopment Analysis (DEA) model for systems with a hierarchical structure.For production systems composed of hierarchical processes, the system efficiency is well represented as the aggregated performance of the components involved in the system. It is identified that the conventional DEA model ignores internal process activities in a university. Therefore, an improved DEA model based on a network structure that accounts for more activities in a university is proposed to measure its overall efficiency. The impact of major functions of a university are taken into account to represent the output variables in assessing the efficiency. Currently, collaboration activities have been given more attention, so, this variable is suggested as a new output for the hierarchical production system. In order to show the practicality of the model, a hypothetical set of data of 14 faculties has been used as a numerical example. The results show that none of the faculties is relatively efficient since its functions were found to be inefficient. The proposed model enables to help the management of university faculties to identify weaknesses of each function and thus to plan for suitable actions on improving the overall performance of the university.  

scholarly journals Recommending investment opportunities given congestion by adaptive network data envelopment analysis model: Assessing sustainability of supply chains

2019 ◽  
Author(s):  
Hossein Hajaji ◽  
Sara Yousefi ◽  
Reza Farzipoor Saen ◽  
Amir Hassanzadeh
Keyword(s):  
Data Envelopment Analysis ◽  
Supply Chains ◽  
Data Envelopment Analysis Model ◽  
Network Data ◽  
Data Envelopment ◽  
Analysis Model ◽  
Adaptive Network ◽  
Dea Model ◽  
Network Data Envelopment Analysis ◽  
Desirable And Undesirable Outputs

Nowadays, forward-thinking companies move beyond conventional structures of organizations and consider all parties of the supply chain. The objective of this paper is to present an adaptive network data envelopment analysis (DEA) model to evaluate overall and divisional efficiency of sustainable supply chains in the presence of desirable and undesirable outputs. Our adaptive network DEA model can assess overall and divisional efficiency of supply chains given managerial and natural disposability. Also, it suggests new investment opportunity given congestion type. A case study is presented.

scholarly journals Optimization on the Credit Risk of Companies in Malaysia With Data Envelopment Analysis Model

2018 ◽  
Vol 7 (4.11) ◽  
pp. 13
Author(s):  
J. X. Agnes Lai ◽  
J. H. Lam ◽  
W. S. Lam
Keyword(s):  
Risk Management ◽  
Data Envelopment Analysis ◽  
Credit Risk ◽  
Financial Institutions ◽  
Financial Services ◽  
Management Practices ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Credit Risk Management ◽  
Dea Model

Financial institutions provide financial services to their clients or retail customers where money is managed. Credit risk has been identified as one of the dominant risks that affect the performance of a company. A firm’s efficiency with different credit risk management practices is still unknown. This research aims to evaluate the credit risk management and efficiency of the financial institutions that are publicly listed in Bursa Malaysia from year 2013-2016 with the Data Envelopment Analysis (DEA) model. Based on the financial ratios, the DEA model allows the relative efficiency of a set of companies to be assessed by solving a linear programming model. The results show that ALLIANZ, APEX, BURSA, ECM, LPI and TAKAFUL are efficient in terms of their credit risk management. This study identifies the efficient and inefficient financial companies in Malaysia.  

A synthesized data envelopment analysis model and its application in resource efficiency evaluation and dynamic trend analysis

2017 ◽  
Vol 29 (2) ◽  
pp. 260-280 ◽  
Author(s):  
Sun Meng ◽  
Wei Zhou ◽  
Jin Chen ◽  
Cheng Zhang
Keyword(s):  
Data Envelopment Analysis ◽  
Malmquist Index ◽  
Resource Efficiency ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Efficiency Evaluation ◽  
Analysis Model ◽  
Dea Model ◽  
The Government ◽  
Input Redundancy

Based on the total factor productivity and the resource efficiency, this paper proposes a synthesized data envelopment analysis (DEA) model by using the DEA approach and the Malmquist index. Furthermore, this model is applied to a comprehensive empirical study of the resource efficiency evaluation in China from 2013 to 2015. By introducing some desirable and undesirable factors, we calculate and analyze the whole resource efficiency, the input redundancy ratio, and the output inefficiency ratio of China from 2013 to 2015 based on the synthesized DEA model. Then, we analyze the dynamic trends of the resource efficiency in 31 provinces of China during these three years by applying the corresponding Malmquist index. After that, some interesting conclusions are derived, which are useful for the government. At last, some practical suggestions about improving the resource efficiency of these provinces are provided.

Sign in / Sign up

Export Citation Format

Share Document