12367-Article Text-37612-4-10-20200612

Technological and Economic Development of Economy
ISSN: 2029-4913 / eISSN: 2029-4921

2020 Volume 26 Issue 4: 808–836
https://doi.org/10.3846/tede.2020.12367
PERFORMANCE EVALUATION MODEL OF ROMANIAN

MANUFACTURING LISTED COMPANIES
BY FUZZY AHP AND TOPSIS
Adrian Ioan BAN 1, Olimpia Iuliana BAN 2, Victoria BOGDAN 3*,

Diana Claudia SABAU POPA 4, Delia TUSE 5
1, 5Department
of Mathematics and Informatics, Faculty of Sciences,
University of Oradea, Oradea, Romania
2Department of Business Economics, Faculty of Economic Sciences, University of Oradea,
Oradea, Romania
3, 4Department of Finance and Accounting, Faculty of Economic Sciences,
University of Oradea, University Street No. 1–5, Oradea, Romania
Received 17 April 2019; accepted 08 March 2020
Abstract. We are interested in the hierarchy of the main Romanian companies in the manufactur-
ing industry by considering eight financial and seven non-financial indicators. Thirty three listed
companies, that are non-financial institutions, were selected for the study and in order to control the
reliability of the data we used the Bucharest Stock Exchange database, official data published by the
Romanian Ministry of Public Finance, and the annual reports released by the companies on their
websites, collecting information for the years 2011–2015. Because the human thinking is subjective
and ambiguous we prefer linguistic variables, converted afterwards in triangular fuzzy numbers,
to represent the importance of indicators. Our method involves the calculation of the weights of
individual or categories of indicators based on Fuzzy Analytic Hierarchy Process. Then, the level of
performance for each company, separately for financial, non-financial and all indicators is obtained
by TOPSIS method. We deduce an objective hierarchy of the companies on a rigorous basis, which is
however dependent from the choice of indicators and the conversion scale of linguistic variables into
triangular fuzzy numbers. Also, following the obtained results we concluded that the overall perfor-
mance of companies for the analyzed period is significantly influenced by non-financial indicators.
Keywords: manufacturing company, indicator, performance, evaluation, fuzzy sets, FAHP, TOPSIS,
hierarchy.
JEL Classification: L25, M21, M41, C60, C63.
Introduction
Stock market is a place where stocks, bonds, or other securities are traded according to
fixed regulations (Rezaie et al., 2014). In the last decade, the Romanian capital market – a
frontier market, but with a possible reclassification as a secondary emerging market in 2018,
*Corresponding author. E-mail: [email protected]
© 2020 The Author(s). Published by VGTU Press

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.
org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author
and source are credited.
Technological and Economic Development of Economy, 2020, 26(4): 808–836 809
according with FTSE Classification of Markets – has made significant progress. Even if BSE
has recorded increasing market capitalization, year by year (Bogdan & Pop, 2008), is still
characterized by volatility which shows that efforts need to be further sustained for its devel-
opment. Several additional requirements of transparency, quality reporting and communica-
tion with investors have been imposed since 2015, yet its relatively fast pace, the Romanian
capital market remains, in terms of market capitalization, one of the smallest among Central
and Easter European markets (B. Dima & S. M. Dima, 2017). The Romanian manufacturing
industry is an emerging market, proven by increasing investments from year to year. Out of
the total listed companies on BSE we selected those who do business in the manufacturing
industry relying on the assumption that companies that activate in IT and manufacturing
industry are more likely to disclose information about intangible assets and corporate value
(Bogdan et al., 2011). Measuring the performance of Romanian manufacturing companies
is of particular interest to investors, shareholders and creditors and in this respect we have
analyzed the content of annual reports of sampled companies. Annual reports are the main
annual source of communication between the company and its external investors through
these means the company publishes investment related information (Bogdan & Pop, 2008).
The companies’ performance indicators used in this paper were divided into two cate-
gories: financial and non-financial indicators. We considered that nowadays measuring the
performance of entities and pursuing their ranking by performance is a complex approach
that cannot be limited to selecting and analyzing only financial indicators even if they are
considered to be significant in the overall performance assessment. Thevaranjan et al. (1999)
observed, it is not always sufficient to create policies and strategic plans by taking only finan-
cial criteria as a basis. Starting from studies conducted by Secme et al. (2009), Yalcin et al.
(2012) and Hategan and Curea-Pitorac (2017), the financial indicators were also divided
into two categories: accounting based indicators or classical financial ratios and value based
indicators or modern ratios. Selection of non-financial indicators has been carried out from
an expanded perspective, so that besides personnel variables, which are found in the studies
we analyzed (Hategan & Curea-Pitorac, 2017; Thevaranjan et al., 1999; Institute of Manage-
ment & Administration [IOMA], 2002) information on research, development, innovation,
environment, CSR, ethics issues and organizational empathy were also included.
In this study the performance evaluation proposed model is twofold: firstly, fuzzy AHP
(FAHP) is used for determining the weights of the criteria and secondly, TOPSIS method
is used for determining the ranking of the selected companies. Over time AHP has be-
come one of the most widely used multiple criteria decision making methods (see, e.g., Lee
et al., 2008; Aydogan, 2011; Calabrese et al., 2013; Amile et al., 2013; Yurdakul, 2004; Xia
& Wu, 2007; Chan & Kumar, 2007). The method takes into consideration the judgments of
decision makers to obtain the importance of each criterion with respect to all other crite-
ria as a pairwise comparison matrix. Then, the weights of the criteria are obtained in few
steps by quite simple calculations. The Fuzzy Set Theory makes the entire process more
flexible (see Kahraman et al., 2003), therefore a fuzzy AHP (FAHP) method was carried out
(Van Laarhoven & Pedrycz, 1983; Chang, 1996; Amile et al., 2013). The already classical
TOPSIS method assumes the ranking of alternatives in multicriteria decision making prob-
810 A. I. Ban et al. Performance evaluation model of Romanian manufacturing listed companies ...
lems by measuring the distances from each alternative taken into consideration to a hypo-
thetical positive ideal alternative and a hypothetical negative ideal alternative (see e.g. Hwang
& Yoon, 1981; Yalcin et al., 2012). Often, FAHP and TOPSIS are used together in assessing
the financial, non-financial or global performance of companies: Yalcin et al. (2012), in or-
der to rank the companies of each sector in the Turkish manufacturing industry; Aydogan
(2011), in the performance measurement of the Turkish aviation companies; Choudhary
and Shankar (2012), in the selection of the thermal power plant; Ertugrul and Karakasoglu
(2009), in the ranking of the fifteen Turkish selected listed companies; Kluczek and Gladysz
(2015), in the exploring of the main possibilities for environmental improvements in the
painting process of the manufacture of central heating boilers; Moghimi et al. (2013), in the
evaluation of Iranian cement producing companies; Secme et al. (2009), in the ranking of
largest five Turkish commercial banks from a financial and nonfinancial perspective; Sun
(2010), for the selection of the global top four notebook computer companies; Buyukozkan
and Cifci (2012), in the determination of key components of an electronic service quality
concept; Gumus (2009), in order to evaluate hazardous waste transport companies; Mandic
et al. (2014), to facilitate the assessment of the Serbian banks, etc..
The main result of our study is a ranking of the manufacturing companies by considering
their total performance based on all financial and non-financial indicators. Nevertheless, the
separate hierarchies on financial indicators and non-financial indicators offer us interesting
conclusions on the companies and on the Romanian manufacturing industry as a whole. The
reminder of this paper is organized as follows. In Section 1 we present the selected financial
and non-financial indicators and in Section 2 we discuss the triangular fuzzy numbers. Then,
in Section 3 we reveal the methodology used: FAHP method and TOPSIS method. We cal-
culate the weights of indicators by FAHP in Section 4. The way of collecting data and their
primary processing are included in Section 5. Next section presents the results of ranking
of the companies based on the TOPSIS method, along with some related discussions. In the
end of our work some conclusions and limits of the study are given.
1. Measuring companies’ performance by financial and nonfinancial indicators

In the economic field, in general, performance is the achievement of organizational goals, as
an amount of everything that contributes to achieving strategic goals, and over time, evaluat-
ing companies’ performance has been a widely debated issue in trying to find the best mea-
suring instrument. The last decades showed that indicators used in measuring performance
are diverse, financial ones are complemented by non-financial indicators and measurement
methods are increasingly diversified in search of the most relevant model (Singh & Vinodh,
2017; Sahu et al., 2017; Yaghoobi & Haddadi, 2016; Dahooie et al., 2019; Fenyves et al., 2018;
Kiselakova et al., 2018; Tripathi et al., 2019). Measuring entity performance is one of the most
effective ways to find the status of each company or entity (Amile et al., 2013). In the present
paper, we apply a performance measurement model for the Romanian companies listed in
the manufacturing industry.
1.1. Financial indicators

Financial indicators are the most used indicators in measuring an entity’s performance. Tak-
ing into account the particularities of the Romanian capital market and the frequency of
using the indicators in order to measure the performance of the Romanian companies in the
manufacturing industry, we have selected in our study some relevant indicators for measur-
ing the financial performance. We have classified them in classical, traditional indicators and
modern indicators of value creation.
Traditional indicators (accounting based indicators)

a) Return on assets (ROA) relates to a company’s after tax net income during a specific
fiscal year to the company’s average total assets during the same year (Yalcin et al.,
2012; Callan & Thomas, 2009; Erhemjamts et al., 2013; Garcia-Castro et al., 2010;
Nelling & Webb, 2009; Pirtea et al., 2014). As Palepu et al. (2000) noted, ROA shows
how much profit a company is able to generate for the money invested in assets. Yalcin
et al. (2012), highlighted that because ROA determines how effectively a company has
used the total assets at its disposal to generate earnings it has a great importance for
manufacturing industries. For ROA calculation we used the formula:
Net income available to common stockholders
ROA = ⋅ 100 . (1)
Total assets
b) Return on equity (ROE) measures the rate of return on the ownership interest of the
common stock owners (Callan & Thomas, 2009; Garcia-Castro et al., 2010; Mahoney
& Roberts, 2007; Makni et al., 2009). It measures a company’s efficiency at generat-
ing profit from net assets and shows how well a company uses the invested money to
generate earnings growth (Ertugrul & Karakasoglu, 2009). For ROE calculation we
used the formula:
Net income
ROE = ⋅ 100 . (2)
Shareholders equity
c) Earnings per share (EPS) is the indicator of each outstanding share of a company
(Shaverdi et al., 2014) disclosing the company’s strength. EPS is calculated by dividing
the company’s net income available to shareholders by the number of shares outstand-
ing during the same period and allows comparison of different company’s power to
make money (Yalcin et al., 2012). According to Jordan et al. (2007), it is a significant
measure because the market reacts to a company’s ability to meet its earnings expecta-
tions. For EPS calculation we used:
Net income available to shareholders
EPS = . (3)
Number of shares outstanding
d) Solvability (SOL) shows to what extent the entity’s total assets (AT) can cover total debts
(DT). Practically, financial solvency is the ability of asset items to honor the entity’s
debts irrespective of their maturity order. The general conceptual framework of IFRS
(International Accounting Standards Board [IASB], 2011), considered that financial
solvency refers to the willingness to use cash for a longer period of time in which to
honor the financial commitments as they become due. SOL was calculated as follows:
Total assets
SOL = ⋅ 100 . (4)
Total liabilities
Value added indicators
a) Economic value added (EVA) is a model of performance measurement of the en-
tity designed by Stewart (1991) and represents practically, the operational profit from
which the opportunity cost of the entire invested capital is deducted, representing the
measure of the real economic profit obtained by the enterprise. EVA is not just a simple
measure of performance but can be adopted to decentralize the management decision
(Cabinova et al., 2018). The EVA calculation relationship proposed by Stewart (1991)
is: EVA = Net operating profit after taxes – Cost of invested capital. Several ways of
representing the EVA indicator are known in performance measurement. In this study
we used the following EVA calculation method:
EVA = Invested capital ⋅ ( ROCE-WACC ) , (5)
where: ROCE = return on capital employed, and WACC = weighted average cost of
capital.
b) Market value added (MVA) measures the difference between the market value of a
company and the total invested capital; as a consequence, if MVA is positive, the com-
pany added value, otherwise, if MVA is negative, the company destroys value (Ciora,
2013). The MVA calculation in the present study was performed after the relationship:
MVA = MV–TIC, (6)
where: MV = market value, and TIC = total invested capital, composed of the present
value of the initial capital invested by the shareholders and the present value of the
reinvested profits.
c) Cash flow return on investment (CFROI) is a complex and comprehensive rating indi-
cator of a company performance, created and developed by Madded (1999), driven by
the need for high performance and the pressure of corporate management to imple-
ment value management systems. CFROI is an indicator that is calculated by complex
means, it is difficult to use by non-financial managers, and in terms of calculation and
adjustment methods it is similar to EVA indicator. In this study we used the calcula-
tion method of CFROI proposed by Martin and Petty (2000), the one-time approach:
GCF-D
CFROI = ⋅ 100, (7)
GI
where: GCF = gross cash flow; D = depreciation of fixed assets; GI = gross investments.
d) Cash value added (CVA) is an indicator built on cash flow theory but exceeds CAPM’s
capital cost imperfections (Martin & Petty, 2000). According to Ciora (2013), the de-
termination of the indicator starts from the company’s gross cash flow during the peri-
od (GCF) and the depreciation of fixed assets (D) as well as the cost of the total capital
used for financing the activity (CTC) is deducted: CVA = GCF – D – CTC. Another
way of presenting the CVA is the ratio to the rate of return on cash flows (CFROI)
used by us in building up this study. In this study we used the following calculation:
CVA = GI ⋅ ( CFROI-WACC ) , (8)

where: GI = value of gross investments; CFROI = cash flow return on investment;
WACC = weighted average cost of capital.
1.2. Nonfinancial indicators

More recent works in measuring the overall or total performance of companies’ demonstrates
the importance and necessity of using non-financial indicators to assess the entity’s com-
petitiveness and efficiency. Ittner et al. (1997), noted that non-financial performance criteria
show up as an emerging asset especially in performance measurement. According to Secme
et al. (2009), in general terms, non-financial performance criteria are defined as the criteria
which cannot be physically measured. As we found in IOMA’s Report (IOMA, 2001, 2002),
these measures can be categorized as follows: customer satisfaction, number of newly added
customers, market share, productivity, quality-process relation, personnel turnover, quality
and flexibility, innovation and process of developing new products, supply resources and
demographic features. Yuksel and Dagdeviren (2010), integrated BSC (Balanced Scorecard)
approach, which is a method of determining business performance using indicators on the
basis of vision and strategies, with fuzzy ANP technique to determine the performance level
of a business in the manufacturing industry. Botezat et al. (2018) showed that in the case of
Romanian producers, the practices related to “green purchasing” and “customer cooperation”
significantly determine the level of companies’ performance. Hategan and Curea-Pitorac
(2017), used as non-financial indicators the number of employees, the listed period and the
ownership structure of the companies (private or state owed). Secme et al. (2009), used five
non-financial criteria in their study, considered usually accepted criteria in the literature:
pricing, differentiation, marketing, service delivery and productivity. The selection of the
non-financial indicators included in our study was made taking into account the mandatory
and voluntary reporting practices of the Romanian companies listed on the BSE, as well as
the international reporting and financial communication requirements. In their selection,
the nature of the industry was also a criterion. Thus, the non-financial indicators included
in this study are:
a) Creativity, Design and Innovation (CRTV), a selected indicator due to the nature of the
industry for which the degree of disclosure of innovation and creativity was pursued
in the annual reports of the companies included in the sample.
b) Personnel or Employee Variables (PERS), for which were followed the disclosure of
employee information (age, education, training, benefits, bonuses, incentives, disclo-
sure of employees performance, distributions by gender, etc.), data being collected
from the annual reports of selected companies.
c) Environmental indicator (MED) regarding information disclosed about carbon diox-
ide, greenhouse gas and other environmental issues reported by sampled companies,
due to the growing international green reporting practices.
d) Corporate Social Responsibility (CSR) variables, for which we aimed to identify infor-
mation disclosed by selected companies about engagements or programs and social
projects involved and voluntary support offered to the social community in various
aspects with social implications.
e) Ethics, Integrity and Deontology (ETIC), an indicator for identifying disclosures about
the existence of a code of ethics, integrity and deontology of the company, or elements
contained in such a code in the annual reports of selected entities. The indicator has
been selected due to growing international reporting and communication practices
on ethical behavior.
f) Artificial Intelligence (ARTQ), an indicator for identifying information disclosed in
the annual reports of selected companies about various software used in the company’s
activity, software creation, and other existing IT assets.
g) Organizational Empathy (EMPTH) introduced by us as a result of the growing im-
portance of the psychological studies conducted on the reporting and financial com-
munication practices, which followed to identify the information disclosed by entities
regarding the degree of cohesion among employees, the social interaction between
them, the exchange ideas, support in achieving new performances, and disclosure of
events organized by companies in order to increase the degree of employee interac-
tion. The choice of the indicator is based on the idea of Binder (2016), regarding the
analysis of performance of organizational work results that may improve the organiza-
tion’s ability to set expectations, more realistically, and also to establish conditions for
optimizing organizational performance based on cultural values.
As opposed to other works related to performance evaluation of manufacturing industry,
based on a metafrontier approach (see, Chiu et al., 2018) we followed a fuzzy AHP method
combined with TOPSIS, taken into account the aim of the study to establish a relevant hier-
archy of the selected companies depending on the proposed indicators.
2. Triangular fuzzy numbers

People cannot precisely express their preferences because of the complexity and vagueness
of decision making problems (Li et al., 2017). In this regard was introduced the fuzzy set
theory by Zadeh (1965), which is suitable for subjective judgment and qualitative assessment
in the evaluation processes of decision making, oriented to the rationality of uncertainty due
to vagueness. A fuzzy set A on a universe X can be represented by a membership function
defined on X with a continuum of grades of membership ranking between 0 and 1 (Zadeh,
1965). If the assigned value to x in X is 0, then the element does not belong to A, if the value
assigned x in X is 1 then the element belongs complete to the set A and if the value lies
between 0 and 1 then the element x in X belongs to the fuzzy set A only partially (Li et al.,
2017; Secme et al., 2009; Yalcin et al., 2012; Ertugrul & Karakasoglu, 2009; Lima et al., 2014;
Mahdavi et al., 2008; Moghimi et al., 2013; Sun, 2010; Ecer, 2018; and others).
Due to their simplicity, the triangular and trapezoidal fuzzy numbers are the most
common used fuzzy numbers in practice, preferred for representing the linguistic varia-
bles. A triangular fuzzy number is a fuzzy set on  (the set of real numbers) given by the
membership function m, where m(x ) = 0 if x < l or x > u, m(x ) = (x − l ) / (m − l ) if l ≤ x ≤ m and m(x ) = (u
) if l ≤ x ≤ m and m(x ) = (u − x )/(u − m) if m ≤ x ≤ u. If l = m and/or m = u then the membership function
m is adapted in an obvious way. As Li et al. (2017) pointed out, a triangular fuzzy number
(TFN) is represented with three points: M = (l , m, u) , where the parameters l, m, u indicate
the smallest possible value, the most promising value and the largest possible value that
describe a fuzzy quantity. The addition of two triangular fuzzy numbers (l1, m1, u1) and (l2,
m2, u2) is defined as (l1, m1, u1) + (l2, m2, u2) = (l1 + l2, m1 + m2, u1 + u2). The reciprocal
of a positive triangular fuzzy number (l, m, u) is given by (1/ u, 1/ m, 1/ l ) (see Yalcin et al.,
2012, for example).
There are several methods to convert fuzzy numbers into crisp real numbers. The ex-
pected value is between the most common approaches (see Heilpern, 1992; Ban & Coroianu,
l + 2m + u
2015). For a triangular fuzzy number (l, m, u), the expected value is .
4
In the present study, TFNs are used to represent the linguistic variables corresponding
to the importance of different criteria, according with the conversion scale given in Table 1.
The reciprocal TFNs are given in Table 1, too.
Table 1. Linguistic variables expressed by triangular fuzzy numbers
Linguistic variables Triangular fuzzy number Reciprocal triangular fuzzy number

Extremely important (1.4, 2, 2.5) (0.40, 0.50, 0.71)
Very important (1.2, 1.8, 2.2) (0.45, 0.55, 0.83)
Important (1, 1.5, 1.8) (0.55, 0.67, 1)
Moderately important (0.8, 1.2, 1.6) (0.62, 0.83, 1.25)
Equally important (1, 1, 1) (1, 1, 1)
3. FAHP and TOPSIS methods

There are several multi-criteria decision making methods – crisp, fuzzy, stochastic or com-
bination of them – elaborated and/or applied in the literature (see, e.g., Ban, 2011; A. I. Ban
& O. Ban, 2012; Chang, 1996; Chan & Yeh, 2001; Deng, 1999; Hwang & Yoon, 1981; Saaty,
1980, 1992, 2008; Yalcin et al., 2012; Zeleny, 1982; Zolfani & Šaparauskas, 2013; Ignatius
et al., 2016; Shaverdi et al., 2016; Erdogan et al., 2017; Samanlioglu et al., 2018). The choice
of a technique used in a multicriteria decision making problem is rather arbitrary, because
each technique has its own advantages and disadvantages and it does not exist a method to
find the most appropriate (see Zavadskas & Turkis, 2011). In the present paper we choose to
calculate the weights of performance indicators by applying FAHP method and to hierarchize
the considered companies on the basis of TOPSIS method.
3.1. FAHP algorithm for determining the weights of indicators

The Analytic Hierarchy Process (AHP)–proposed by Saaty (1980) is a method of measure-
ment through pairwise comparisons. It is often used in multi-attribute decision making prob-
lems (see e.g. Saaty, 2008) to calculate the weights of indicators based on a pairwise com-
parison matrix with positive elements aij , i, j ∈ {1,..., n} such that aii = 1 for every i ∈ {1,..., n}.
1
Usually, a such matrix is reciprocal, that is aij = , for each i, j ∈ {1,..., n}. We say that a
a ji
pairwise comparison matrix is consistent if aij ajk = aik for each i, j, k ∈ {1,..., n}. The incon-
sistency of pairwise comparison matrices is measured by consistency indices (see the survey
l −n
Kou et al., 2016). Due to its simplicity, the consistency index CI defined as CI = max ,
n −1
where lmax is the principle eigenvalue of the matrix aij ( )i, j∈{1,...,n}
is preferred (see Ramik &
Korviny, 2010; Saaty, 1991; Bernasconi et al., 2010). Generally, if CI < 0.1 then the matrix is
quite consistent to be used in the computation of weights (see Leung & Cao, 2000).
The analytic hierarchy process is often criticized due its inability to handle the uncer-
tainty and imprecision which appear in solving multi-criteria analysis problems. The fuzzy
approach overcomes this weakness and makes the entire process more flexible, keeping its
accuracy.
The Chang’s extent FAHP method (Chang, 1996) is the most frequently used algorithm
in the present topic, although it is sometimes criticized (see Ahmed & Kilic, 2015, 2019;
Wang et al., 2008; Zhu et al., 1999). As in Yalcin et al. (2012), we use the Chang’s method
to calculate the weights of indicators in a set {C1 ,..., Cn } starting from a consistent fuzzy
pairwise comparison matrix M = ( Mij )i , j∈{1,...,n}. Some consistency measures for pairwise
comparison matrices with fuzzy elements were investigated in some papers (see, e.g., Buckley
et al. 2001; Ramik & Korviny, 2010). They are very complicated and, in addition, they have
not been tested so well in practice. We prefer to change a fuzzy pairwise comparison matrix
into a crisp matrix (by defuzzifying with the expected value, for example) whose consistency
index CI, defined as above, is computed to conclude the consistency or inconsistency (see
Secme et al., 2009).
The triangular fuzzy number Mij = (lij , mij , uij ) is situated on line i and column j in M
and it signifies the importance of the indicator i with respect to the indicator j. It is natural
to consider Mii = (1, 1, 1) for every i ∈ {1,..., n}. Usually (see e.g. Yalcin et al., 2012 or Deng,
1999), Mij = (lij , mij , uij ) with i < j are given and Mij with i > j are considered as reciprocal
 1 1 1
fuzzy numbers, that is Mij =  j , j , j  , for every i, j ∈ {1,..., n} , i > j . Under the above
u m l 
 i i i 
notations, the following algorithm can be applied:
Algorithm 1. Let M= i
j
(lij , mij , uij ), i ∈ {1,..., n} , j ∈ {1,..., n} the fuzzy pairwise comparison ma-
trix of a set of criteria, {C1 ,..., Cn }.
Step 1: For i ∈ {1,..., n} compute
 
∑ ∑ ∑
n n n
 lij mij uj 
j 1 i
=Si (
=
=
)
li , mi , ui 
j 1=
,
j 1 =
, . (9)
∑ ∑ ∑ ∑ ∑ ∑
n n n n n n
 uij mij lj 
=i 1 =j 1 =i 1 =j 1 =i 1 =j 1 i 
Step 2: For l , k ∈ {1,..., n} compute
 1, if ml ≥ mk

 0, if lk ≥ ul

vlk =  . (10)
 lk − ul
 , otherwise
 ( ml − ul ) − ( mk − lk )
{
di′ = min vi1 ,..., vi ,i −1 , vi ,i +1 ,..., vin . } (11)
di′
di = n
(12)
∑ i=1 di′
the weight of the indicator Ci , i ∈ {1,..., n}.
3.2. TOPSIS algorithm for determining the ordering of a set of companies

In the present paper the weights of the indicators are crisp numbers obtained by the Chang’s
extent FAHP method. The performance of a company with respect to an indicator is a crisp
number too, obtained from official sources: Bucharest Stock Exchange database, the annual
reports released by the companies on their websites and published by the Romanian Ministry
of Public Finance. We conclude that a crisp method is suitable to be applied for determining
the ordering of the companies with respect to their performance. Between the methods of
ranking of the alternatives in multi-criteria decision making problems, the classical TOPSIS
(Technique for Order Performance by Similarity to Ideal Solution) and VIKOR (VlseKriteri-
jumska Optimizacija I Kompromisno Resenje) are preferred for their simplicity.
In brief, TOPSIS (see Hwang & Yoon, 1981) assumes the representation of alternatives
which must be evaluated as points in a finite dimensional space. Then, a positive ideal al-
ternative and a negative ideal alternative are determined in the same space. The place of an
alternative is better in the final hierarchy if it is close to the positive ideal alternative and far
{
to the negative ideal alternative. The corresponding algorithm is given below. Let A1 ,..., AJ }
be a set of companies which must be ordered with respect to their performance on n indi-
cators, {C1 ,..., Cn }, the weight of every indicator being known.
Algorithm 2. Let w ji , i ∈ {1,..., n} , j ∈ {1,..., J } the performance of the company j under the
indicator i. Let di , i ∈ {1,..., n} the normalized weight of the indicator i.
Step 1: For i ∈ {1,..., n} , j ∈ {1,..., J } compute
w ji
rji = . (13)
J
∑ j=1 2
w ji
Step 2: For i ∈ {1,..., n} , j ∈ {1,..., J } compute

V ji = di rji . (14)
{
Vi+ = max V1i ,...,VJi } (15)
and
{
Vi− = min V1i ,...,VJi . } (16)
Step 4: For j ∈ {1,..., J } compute
∑ i=1(Vji − Vi + )
n 2
=d +j (17)
and
∑ i =1(Vji − Vi − )
n 2
=d −j . (18)
Step 5: For j ∈ {1,..., J } compute

d −j
Dj = . (19)
d −j + d +j
The decreasing ordering of the values D j , j ∈ {1,..., J } give us the decreasing ordering of
the companies A1 ,..., AJ .
4. Weights of indicators by FAHP

4.1. Weights of value added indicators
As we already mentioned in Section 1.1., EVA, MVA, CFROI and CVA are considered as
value added indicators in our study. The fuzzy pairwise comparison matrix of these crite-
ria is given in Table 2 taking into account the conversion scale in Table 1. As example, the
significance of the first line in Table 2 means that EVA is important with respect to MVA
and CFROI and extremely important with respect to CVA. As usually (see e.g. Yalcin et al.,
2012), the elements below the diagonal are the reciprocal triangular fuzzy numbers of their
symmetrical. Going to the crisp pairwise comparison matrix by the expected value, we obtain
CI = 0.0268 < 0.1, that is we can consider that the matrix given in Table 2 is consistent. Based
on the data in Table 2, we apply Algorithm 1 to calculate the weights of the value added
indicators. According to the FAHP method the most important value based financial indi-
cators are EVA (0.390) and MVA (0.311), followed by CFROI (0.212) and CVA (0.087). We
can consider the value based financial performance as a composite indicator of the formula
0.390·EVA + 0.311·MVA + 0.212·CFROI + 0.087·CVA.
Table 2. Fuzzy pair-wise comparison matrix for the sub-criteria of the VFP (value based financial
performance) main-criteria
Indicators EVA MVA CFROI CVA

EVA (1, 1, 1) (1, 1.5, 1.8) (1, 1.5, 1.8) (1.4, 2, 2.5)
MVA (0.55, 0.67, 1) (1, 1, 1) (1, 1.5, 1.8) (1.2, 1.8, 2.2)
CFROI (0.55, 0.67, 1) (0.55, 0.67, 1) (1, 1, 1) (1, 1.5, 1.8)
CVA (0.40, 0.50, 0.71) (0.45, 0.55, 0.83) (0.55, 0.67, 1) (1, 1, 1)
4.2. Weights of accounting based indicators

The fuzzy pairwise comparison matrix of the accounting based indicators ROA, ROE, EPS,
and SOL, as they were introduced in Section 1.1., is given in Table 3. As we can see from
the first line in Table 3, ROA is moderately important with respect to ROE, important with
respect to EPS, and very important with respect to SOL. On the other hand, the matrix given
in Table 3 is consistent because the corresponding crisp matrix has CI = 0.0291 < 0.1. We ap-
ply again Algorithm 1 to obtain the weights of these indicators. FAHP method revealed that
Table 3. Fuzzy pair-wise comparison matrix for the sub-criteria of the AFP (accounting based financial
performance) main-criteria
Indicator ROA ROE EPS SOL

ROA (1, 1, 1) (0.8, 1.2, 1.6) (1, 1.5, 1.8) (1.2, 1.8, 2.2)
ROE (0.62, 0.83, 1.25) (1, 1, 1) (1, 1.5, 1.8) (1.2, 1.8, 2.2)
EPS (0.55, 0.67, 1) (0.55, 0.67, 1) (1, 1, 1) (1.2, 1.8, 2.2)
SOL (0.45, 0.55, 0.83) (0.45, 0.55, 0.83) (0.45, 0.55, 0.83) (1, 1, 1)
the most important accounting based financial indicators are ROA (0.338) and ROE (0.314),
followed by EPS (0.243) and SOL (0.105). Thus, we can look at accounting based financial
performance as a composite indicator 0.338·ROA + 0.314·ROE + 0.243·EPS + 0.105·SOL.
4.3. Weights of non-financial indicators

Seven non-financial indicators, described in Section 1.2., were selected for our study: CRTV,
PERS, MED, CSR, ETIC, ARTQ, EMPTH. It is not so easy to establish an ordering between
each pair of these indicators, but, in the present study, we consider the pairwise comparison
matrix given in Table 4. As usually, the triangular fuzzy number from the line i and column
j, i ≤ j , indicate the importance of the indicator i with respect to the indicator j, by consider-
ing the conversion scale in Table 1. As it can be seen in Table 4, creativity, design and inno-
vation is extremely important with respect to personnel variables and artificial intelligence,
important with respect to environmental variables, corporate and social responsibility indica-
tor and organizational empathy variables, but moderately important with respect to organi-
zational ethical behaviour. We calculate the consistency index of the crisp matrix obtained
after defuzzifying with the expected value from the fuzzy pairwise comparison matrix given
in Table 4. We obtain CI = 0.0559 < 0.1, therefore it can be considered as consistent. By ap-
plying again Algorithm 1, based on the data in Table 4, we obtain the weights of non-financial
indicators in a normalized form. According to FAHP method, the most important non-
financial indicators are CRTV (0.207), PERS (0.205) and MED (0.166), representing variables
assigned to information disclosed by the companies in regard with creativity, design, re-
search, innovation practices, followed by variables that concerned personnel and information
regarding environmental issues. The normalized weights obtained for CSR are 0.136 and for
Table 4. Fuzzy pair-wise comparison matrix for the sub-criteria of the non-FP main-criteria
Indicators CRTV PERS MED CSR ETIC ARTFQ EMPTH

CRTV (1, 1, 1) (1.4, 2, 2.5) (1, 1.5, 1.8) (1, 1.5, 1.8) (0.8, 1.2, 1.6) (1.4, 2, 2.5) (1, 1.5, 1.8)
PERS (0.40,0.50,0.71) (1, 1, 1) (1, 1.5, 1.8) (1.4, 2, 2.5) (1.2, 1.8, 2.2) (1.2, 1.8, 2.2) (1.4, 2, 2.5)
MED (0.55,0.67, 1) (0.55, 0.67, 1) (1, 1, 1) (1, 1.5, 1.8) (1.2, 1.8, 2.2) (1.2, 1.8, 2.2) (0.8, 1.2, 1.6)
CSR (0.55,0.67, 1) (0.40,0.50,0.71) (0.55, 0.67, 1) (1, 1, 1) (1.2, 1.8, 2.2) (0.8, 1.2, 1.6) (1, 1.5, 1.8)
ETIC (0.62,0.83,1.25) (0.45,0.55,0.83) (0.45,0.55,0.83) (0.45,0.55,0.83) (1, 1, 1) (0.8, 1.2, 1.6) (1.2, 1.8, 2.2)
ARTFQ (0.40,0.50,0.71) (0.45,0.55,0.83) (0.45,0.55,0.83) (0.62,0.83,1.25) (0.62, 0.83, 1.25) (1, 1, 1) (0.8, 1.2, 1.6)
EMPTH (0.55,0.67, 1) (0.40,0.50,0.71) (0.62,0.83,1.25) (0.55, 0.67, 1) (0.45, 0.55, 0.83) (0.62, 0.83, 1.25) (1, 1, 1)
ETIC, 0.117. FAHP also revealed that, the least important non-financial indicators are ARTQ
(0.090) and EMPTH (0.079), which means that variables assigned to information disclosed in
regard to issues concerning artificial intelligence tools used by companies and organizational
empathy aspects are very little relevant to the Romanian manufacturing industry. Moreover,
within the framework set out in this article we can consider a composite of the non-financial
performance as 0.207· CRTV + 0.205 · PERS + 0.166 · MED + 0.136 · CSR + 0.117· ETIC +
0.090 ·ARTFQ + 0.079 ·EMPTH.
4.4. Weights of categories of indicators

The value added financial indicators are usually considered as moderately important with re-
spect to accounting based indicators, thus the corresponding fuzzy pairwise comparison ma-
trix could be given as in Table 5. It is a consistent matrix because we obtain CI = 0.0291 < 0.1
for the corresponding crisp matrix.
The application of Algorithm 1 leads to the weight of value added indicators and of ac-
counting based indicators equal to 0.569 and 0.431, respectively. According with this result,
the financial performance can be aggregated into a composite indicator of value based fi-
nancial performance and accounting based financial performance as 0.569·VFP + 0.431·AFP.
It is obvious that the financial indicators are more important than the non-financial indi-
cators, consequently, we can consider the fuzzy pairwise comparison matrix in Table 6. The
matrix can be considered as consistent because, passing to the crisp matrix by the expected
value, we get CI = 0.0235 < 0.1.
We apply Algorithm 1 to calculate the weights of the indicators and we obtained for fi-
nancial indicators the weight 0.702 and for non-financial indicators, 0.298. That is the global
performance can be looked as a composite indicator of financial and non-financial perfor-
mance as 0.702·FP + 0.298·nonFP.
Financial performance and non-financial performance indicators have different level of
significance for different users (Ertugrul & Karakasoglu, 2009) and different groups of stake-
holders with varying objectives and expectations, obviously approach financial and non-
financial analysis from different perspectives (Moyer et al., 1992). As Sekreter et al. (2004)
highlighted, managers are especially interested in growth indicators while investors and
shareholders focus on profitability ratios, creditors being concerned with financial leverage
Table 5. Fuzzy pair-wise comparison matrix for the main-criteria VFP and AFP
Indicator VFP AFP

VFP (1, 1, 1) (0.8, 1.2, 1.6)
AFP (0.62, 0.83, 1.25) (1, 1, 1)
Table 6. Fuzzy pair-wise comparison matrix for the main-criteria FP, non-FP
Indicator FP Non-FP
FP (1, 1, 1) (1, 1.5, 1.8)
non FP (0.55, 0.67, 1) (1, 1, 1)
ratios. We can add that as to the non-financial indicators, managers will be more interested
in design, research, innovation, personnel and environmental indicators while, for instance,
investors are interested in CSR variables more than creditors or even managers, or sharehold-
ers may be more interested in corporate ethical behavior than managers or creditors. We
conclude that, according to FAHP, the most important financial performance indicator for
Romanian manufacturing industry is a value based indicator, EVA, and the most important
non-financial performance indicator is creativity, design and innovation, CRTV.
5. Sample and data collection

In order to evaluate the performance of Romanian manufacturing listed companies we have
selected 33 companies, listed on the BSE, that are non-financial institutions. The data for the
determination of the selected financial indicators were manually collected from the financial
statements of the Romanian manufacturing companies and from the BSE public database.
Most of the information was collected from the balance sheet, the profit and loss account and
the explanatory notes of the selected companies. Non-financial information was identified
and collected from the annual reports. As Bassemir and Novotny-Farkas (2018) found, all
German IFRS private companies disclose significantly more information in their financial re-
ports and also show a higher propensity to publish information voluntarily on their websites.
Thus, we considered that IFRS Romanian private companies have similar behavior regarding
disclosure of information on their websites. Accordingly, companies’ annual reports have
been downloaded from official company websites while consulting the official BSE website
for additional information.
The selected financial indicators were calculated manually after collecting the information
necessary to determine them, using the calculation formulas presented in sections 1.1. For
non-financial variables the scoring technique was used for measuring the degree of disclo-
sure. Thus, the scores chosen for non-financial information disclosed in the company’s annual
reports are: 2-for detailed information disclosed regarding the indicator; 1.5-for non-detailed
information disclosed regarding the indicator; 1-for existing but poorly disclosed informa-
tion regarding the indicator and 0, where there is no disclosed information regarding the
indicator. To determine the average degree of disclosure of non-financial information, we
used the formula:
∑
n
x
i =1 i
Di NFP = , (20)
n
where xi indicates the scores granted for the non-financial information recognized in the
annual reports according to their degree of detail and n indicates the number of selected
non-financial variables (7 indicators). The closer the average degree of disclosure is to 2, the
higher the volume of non-financial information, communicated in relation to the 7 selected
indicators.
Financial and non-financial indicators were calculated and evaluated for the financial
years 2011, 2012, 2013, 2014 and 2015. In the absence of the necessary information to de-
termine the indicators from the sample of listed companies, the following were eliminated:
Boromir, Electromagnetica, Electroaparataj, Romcarbon, Sinteza and Vrancart. Following
Hategan and Curea-Pitorac (2017), to reduce the risk of biases and control the reliability
of the data, we validated the value of the financial indicators from three different sources:
the BSE database, official data published by the Romanian Ministry of Public Finance, and
the reports released by the companies on their websites. Starting from 1 January 2012, the
Romanian companies listed on the BSE have moved to an International Financial Report-
ing Standards based accounting, so we can consider, as Hategan and Curea-Pitorac (2017)
highlighted, this moment as a turning point in the Romanian financial reporting practice.
For these reasons we considered that financial years from 2011 to 2015 are relevant for the
study. In Table 7, we present the selected companies for which the financial and non-financial
indicators have been determined.
Table 7. Selected Romanian manufacturing listed companies
No. Company BSE Code

1. AEROSTAR S.A. ARS
2. ALBALACT S.A. ALBZ
3. ALRO S.A. ALR
4. ALTUR S.A. ALT
5. ANTIBIOTICE S.A. ATB
6. ARMĂTURA S.A. ARM
7. ARTEGO S.A. ARTE
8. BERMAS S.A. BRM
9. BIOFARM S.A. BIO
10. CARBOCHIM S.A. CBC
11. CEMACON S.A. CEON
12. COMELF S.A. CMF
13. COMPA S.A. CMP
14. CONTED S.A. CNTE
15. ELECTROARGES S.A. ELGS
16. ELECTROPUTERE S.A. EPT
17. ELECTROCONTACT S.A. ECT
18. IAR S.A. IARV
19. MECANICA CEAHLĂU S.A. MECF
20. MECANICA FINA S.A. MECE
21. PREBET S.A. PREB
22. PREFAB S.A. PREH
23. PRODPLAST S.A. PPL
24. RETRASIB S.A. RTRA
25. ROMCAB S.A. MCAB
26. ROMPETROL RAFINARE S.A. RRC
27. ȘANTIERUL NAVAL ORȘOVA S.A. SNO
28. STIROM S.A. STIB
29. TERAPLAST S.A. TRP
30. TMK-ARTROM S.A. ART
31. TURBOMECANICA S.A. TBM
32. UAMT S.A. UAM
33. ZENTIVA S.A. SCD
6. Performance evaluation of companies

6.1. Performance evaluation with respect to value added indicators
Taking into account the results of the companies on the VFP indicators (EVA, MVA, CFROI,
CVA) and their weights, by applying the TOPSIS method (see Algorithm 2) we obtain a
hierarchy of the companies in Table 8. The ranking results show that ALR is the first ranked
company in terms of value based financial performance value for the years 2011, 2012 and
2015, but surprisingly has recorded the lowest value based financial performance for 2013, in
the next financial year taking the third position in the hierarchy. RRC had the lowest value
based financial performance value among the analyzed manufacturing companies for 2015,
although was ranked first in the hierarchy for 2013 and 2014. Analyzing the hierarchy of the
first ten companies in the table above, it is worth mentioning that the best ranked in relation
to the value based financial indicators is the machine industry for 2011, 2012 and 2013 as
well as the pharmaceutical industry for the years 2014 and 2015.
Table 8. Ranking of the companies in relation to VFP indicators

Rank Com Rank Com Rank Com Rank Com Rank Com
Perform Perform Perform Perform Perform
2011 pany 2012 pany 2013 pany 2014 pany 2015 pany
1 ALR 0.65122 1 ALR 0.64008 1 RRC 0.61501 1 RRC 0.53744 1 ALR 0.77399
2 RRC 0.51651 2 RRC 0.51123 2 ATB 0.58755 2 SCD 0.47229 2 SCD 0.65796
3 ELGS 0.51290 3 ATB 0.50123 3 SCD 0.57705 3 ALR 0.46966 3 MCAB 0.65588
4 MECF 0.50258 4 ELGS 0.49678 4 CNTE 0.57243 4 BIO 0.46205 4 TBM 0.64084
5 CNTE 0.50102 5 CNTE 0.48943 5 RTRA 0.57002 5 MCAB 0.45722 5 ALBZ 0.64055
6 RTRA 0.49694 6 MECF 0.48853 6 UAM 0.56931 6 ATB 0.45639 6 ARS 0.63615
7 SCD 0.49430 7 ARTE 0.48504 7 MCAB 0.56915 7 ELGS 0.45622 7 BIO 0.63613
8 ARS 0.49388 8 SCD 0.48174 8 ELGS 0.56870 8 CNTE 0.45449 8 TRP 0.63507
9 ATB 0.49210 9 BRM 0.48164 9 TRP 0.56416 9 ARS 0.45269 9 ELGS 0.63421
10 MCAB 0.49088 10 CMF 0.47951 10 BRM 0.56348 10 MECF 0.45083 10 ATB 0.63128
11 BIO 0.49082 11 UAM 0.47788 11 ARTE 0.56205 11 ALBZ 0.44992 11 ARTE 0.63069
12 CMF 0.49066 12 PREB 0.47717 12 ALBZ 0.56171 12 BRM 0.44708 12 EPT 0.62859
13 BRM 0.49029 13 MCAB 0.47643 13 ARS 0.56141 13 UAM 0.44688 13 BRM 0.62853
14 UAM 0.48565 14 ALBZ 0.47638 14 CEON 0.56081 14 CMF 0.44515 14 CNTE 0.62676
15 ALBZ 0.48540 15 ARS 0.47521 15 EPT 0.56067 15 CEON 0.44487 15 MECF 0.62344
16 PPL 0.48456 16 CMP 0.47451 16 CMF 0.55996 16 ARTE 0.44386 16 UAM 0.62333
17 ARTE 0.48456 17 ART 0.47209 17 BIO 0.55729 17 SNO 0.44289 17 ART 0.62264
18 PREB 0.48451 18 CBC 0.47172 18 PREB 0.55714 18 TRP 0.44006 18 CBC 0.62231
19 CBC 0.48302 19 STIB 0.47029 19 CBC 0.55703 19 IARV 0.43944 19 CMF 0.62193
20 ALT 0.48221 20 CEON 0.46885 20 CMP 0.55681 20 CBC 0.43901 20 PREB 0.62133
21 STIB 0.47960 21 PREH 0.46714 21 MECF 0.55601 21 PREB 0.43654 21 RTRA 0.62033
22 CEON 0.47945 22 RTRA 0.46399 22 PREH 0.55473 22 TBM 0.43586 22 PPL 0.61848
23 IARV 0.47831 23 BIO 0.46320 23 ALT 0.55384 23 ALT 0.43535 23 STIB 0.61797
24 SNO 0.47802 24 MECE 0.46160 24 ARM 0.55315 24 PPL 0.43511 24 SNO 0.61640
25 CMP 0.47738 25 TRP 0.46159 25 ECT 0.55156 25 MECE 0.43307 25 MECE 0.61536
26 ECT 0.47536 26 ECT 0.46146 26 MECE 0.55151 26 PREH 0.43286 26 ECT 0.61409
27 TRP 0.47471 27 IARV 0.46122 27 SNO 0.55102 27 ECT 0.43184 27 ALT 0.61166
28 PREH 0.47409 28 SNO 0.45822 28 ART 0.54863 28 CMP 0.42785 28 PREH 0.61161
29 MECE 0.47255 29 ARM 0.45614 29 IARV 0.54772 29 EPT 0.42501 29 CEON 0.60778
30 ARM 0.47233 30 TBM 0.45568 30 PPL 0.54658 30 ART 0.42401 30 CMP 0.60636
31 EPT 0.46566 31 PPL 0.45490 31 TBM 0.54651 31 STIB 0.41942 31 IARV 0.60616
32 TBM 0.45739 32 ALT 0.45470 32 STIB 0.54628 32 RTRA 0.41354 32 ARM 0.56114
33 ART 0.44089 33 EPT 0.42177 33 ALR 0.32328 33 ARM 0.41205 33 RRC 0.18265
6.2. Performance evaluation with respect to traditional accounting indicators

By applying Algorithm 2 (we recall, it is based on the TOPSIS method) to the results of the
companies on the AFP indicators (ROA, ROE, EPS, SOL) and their weights as they were
calculated, we obtained the hierarchy of the companies given in Table 9. The ranking results
showed that CNTE was the first ranked company in terms of accounting or traditional based
financial indicators for the financial years 2011–2014 while MCAB was the first ranked com-
pany for 2015. ARM had the lowest value of accounting based financial performance, for the
financial year 2011, though was ranked second for 2012 and 2014. Also, CEON was ranked
on the last position in the hierarchy for 2012 and 2013. Analyzing the hierarchies we can
conclude that the best represented industries are the machine, plastics and pharmaceutical
industry.
Table 9. Ranking of the companies in relation to AFP indicators

1 CNTE 0.88793 1 CNTE 0.58169 1 CNTE 0.73692 1 CNTE 0.57081 1 MCAB 0.58053
2 ELGS 0.61131 2 ARM 0.47977 2 PPL 0.54376 2 ARM 0.51482 2 ARS 0.53637
3 MECF 0.60312 3 ELGS 0.41305 3 ELGS 0.52530 3 SCD 0.41820 3 CNTE 0.53189
4 ALR 0.58516 4 EPT 0.39598 4 MCAB 0.51381 4 BIO 0.40510 4 ARM 0.46113
5 SCD 0.58455 5 MECF 0.37097 5 BIO 0.51278 5 MCAB 0.38148 5 PPL 0.45660
6 STIB 0.58230 6 BIO 0.34433 6 SCD 0.50637 6 ELGS 0.34667 6 BIO 0.45560
7 ART 0.58015 7 SCD 0.33617 7 ARM 0.49647 7 MECF 0.34462 7 SCD 0.45043
8 BIO 0.57409 8 ARTE 0.33515 8 UAM 0.47480 8 ARS 0.32609 8 TRP 0.44533
9 PPL 0.57330 9 ARS 0.29955 9 EPT 0.46235 9 EPT 0.32246 9 ARTE 0.40521
10 BRM 0.56978 10 CMP 0.29796 10 ARS 0.46105 10 TRP 0.32010 10 IARV 0.35260
11 ARS 0.56939 11 ART 0.29535 11 ATB 0.45578 11 ATB 0.31756 11 ELGS 0.35102
12 ATB 0.55711 12 BRM 0.28716 12 RTRA 0.43924 12 CMP 0.31695 12 ALBZ 0.34525
13 MCAB 0.55460 13 ATB 0.28707 13 ARTE 0.43839 13 SNO 0.31561 13 CMP 0.33463
14 ARTE 0.55395 14 PREB 0.28683 14 CMP 0.43332 14 CMF 0.31019 14 RRC 0.31881
15 CMP 0.55237 15 STIB 0.27799 15 BRM 0.43293 15 ALBZ 0.30695 15 CEON 0.31534
16 CBC 0.54998 16 ALBZ 0.27669 16 ALBZ 0.43117 16 ART 0.29397 16 BRM 0.30726
17 ALBZ 0.54528 17 ALT 0.27611 17 MECE 0.42743 17 IARV 0.29316 17 ATB 0.30460
18 IARV 0.54264 18 MCAB 0.27015 18 TRP 0.42332 18 UAM 0.28747 18 EPT 0.30080
19 MECE 0.54241 19 CMF 0.26729 19 CMF 0.41184 19 ARTE 0.28008 19 STIB 0.28787
20 PREB 0.54195 20 MECE 0.25929 20 ART 0.40074 20 BRM 0.27063 20 TBM 0.28280
21 RTRA 0.53998 21 UAM 0.25618 21 MECF 0.40036 21 STIB 0.26199 21 MECF 0.28263
22 PREH 0.53565 22 PREH 0.24462 22 IARV 0.39813 22 CBC 0.25897 22 CBC 0.27363
23 CMF 0.53460 23 IARV 0.24422 23 STIB 0.39720 23 MECF 0.24577 23 UAM 0.26032
24 UAM 0.53390 24 CBC 0.23442 24 CBC 0.39681 24 PREH 0.23790 24 PREB 0.23436
25 SNO 0.53382 25 PPL 0.22788 25 PREB 0.39569 25 PREB 0.20754 25 MECE 0.22786
26 ALT 0.52848 26 TRP 0.17358 26 ALT 0.39455 26 ALT 0.20214 26 CMF 0.20830
27 ECT 0.50735 27 RTRA 0.17090 27 PREH 0.38680 27 CEON 0.18941 27 PREH 0.18648
28 TRP 0.50428 28 ECT 0.14699 28 SNO 0.34616 28 PPL 0.17771 28 SNO 0.18566
29 CEON 0.50187 29 SNO 0.14172 29 ECT 0.33356 29 ALR 0.16226 29 ART 0.18390
30 RRC 0.48033 30 RRC 0.11945 30 ALR 0.30864 30 TBM 0.15533 30 ALR 0.17995
31 TBM 0.46236 31 TBM 0.11895 31 RRC 0.28067 31 RRC 0.14721 31 RTRA 0.14539
32 EPT 0.41330 32 ALR 0.10543 32 TBM 0.25676 32 ECT 0.11728 32 ALT 0.12608
33 ARM 0.10504 33 CEON 0.05350 33 CEON 0.19714 33 RTRA 0.00653 33 ECT 0.10835
6.3. Performance evaluation with respect to all financial indicators

The weights of value added indicators and accounting based indicators were calculated and
have the following values, VFP = 0.569 and AFP = 0.431. By considering the levels of per-
formance on value added indicators and accounting based indicators given in Tables 8 and 9,
respectively, for every company, we apply again Algorithm 2. We obtain a hierarchy of com-
panies with respect to all financial indicators considered in the present study (see Table 10).
The hierarchy of companies revealed that the most performing company for the analyzed
period was CNTE (2011–2014), representing textile and leather garment industry, while the
weakest as financial performance are CEON and RRC. The obtained results are not surpris-
ing. The best represented industries if we look upon the ranking of the first ten companies
are still the pharmaceutical, machine and plastic industries. Also, as we can observe the
companies’ hierarchy after all financial indicators is more influenced by traditional indicators
(AFP) than those based on value added indicators (VFP).
Table 10. Ranking of the companies in relation to all financial indicators (VFP and AFP)
1 CNTE 0.77957 1 CNTE 0.81505 1 CNTE 0.93144 1 CNTE 0.88378 1 MCAB 0.87252
2 ALR 0.65412 2 ARM 0.70473 2 PPL 0.66937 2 ARM 0.80187 2 ARS 0.83206
3 ELGS 0.60037 3 ELGS 0.64128 3 ELGS 0.65657 3 SCD 0.71760 3 CNTE 0.81978
4 MECF 0.58437 4 EPT 0.57330 4 MCAB 0.64032 4 BIO 0.69147 4 SCD 0.75788
5 SCD 0.55966 5 MECF 0.56977 5 SCD 0.63424 5 MCAB 0.65061 5 BIO 0.74922
6 STIB 0.54720 6 BIO 0.51440 6 BIO 0.63161 6 ELGS 0.59235 6 PPL 0.75954
7 BIO 0.54664 7 SCD 0.50928 7 ARM 0.60569 7 MECF 0.58698 7 TRP 0.73594
8 ARS 0.54392 8 ARTE 0.50907 8 UAM 0.58570 8 ARS 0.55658 8 ARM 0.69645
9 BRM 0.54189 9 ARS 0.44503 9 ATB 0.57107 9 ATB 0.54341 9 ARTE 0.68309
10 PPL 0.54158 10 CMP 0.44206 10 EPT 0.56318 10 TRP 0.54233 10 ELGS 0.61825
11 ATB 0.53007 11 ART 0.43667 11 ARS 0.56189 11 EPT 0.54119 11 ALBZ 0.61510
12 MCAB 0.52667 12 ATB 0.43464 12 RTRA 0.53858 12 SNO 0.53574 12 IARV 0.60236
13 ARTE 0.52188 13 BRM 0.42657 13 ARTE 0.53209 13 CMP 0.53306 13 CMP 0.58108
14 ART 0.52017 14 PREB 0.42421 14 BRM 0.52596 14 CMF 0.52737 14 BRM 0.56351
15 CBC 0.51680 15 ALBZ 0.40660 15 ALBZ 0.52245 15 ALBZ 0.52342 15 ATB 0.56221
16 CMP 0.51568 16 STIB 0.40646 16 CMP 0.52180 16 IARV 0.49695 16 CEON 0.55958
17 RTRA 0.51533 17 ALT 0.39758 17 TRP 0.51407 17 ART 0.49376 17 EPT 0.55631
18 ALBZ 0.51348 18 MCAB 0.39543 18 MECE 0.51031 18 UAM 0.48955 18 TBM 0.54414
19 PREB 0.50945 19 CMF 0.39174 19 CMF 0.49656 19 ARTE 0.47615 19 STIB 0.53548
20 IARV 0.50629 20 UAM 0.37203 20 MECF 0.47936 20 BRM 0.46103 20 MECF 0.53329
21 CMF 0.50565 21 MECE 0.37130 21 CBC 0.47580 21 STIB 0.43910 21 CBC 0.52308
22 MECE 0.50252 22 PREH 0.34808 22 PREB 0.47451 22 CBC 0.43899 22 ALR 0.51889
23 UAM 0.50178 23 IARV 0.34529 23 ART 0.47415 23 MECE 0.41503 23 UAM 0.51007
24 SNO 0.49701 24 CBC 0.33220 24 ALT 0.47059 24 PREH 0.40161 24 PREB 0.48368
25 PREH 0.49652 25 PPL 0.31500 25 IARV 0.47022 25 PREB 0.35071 25 MECE 0.47386
26 ALT 0.49400 26 ALR 0.27665 26 STIB 0.46794 26 ALT 0.34119 26 CMF 0.46102
27 ECT 0.46778 27 TRP 0.22320 27 PREH 0.46194 27 CEON 0.32183 27 ART 0.44186
28 CEON 0.46432 28 RTRA 0.21953 28 SNO 0.41281 28 PPL 0.29930 28 SNO 0.43932
29 TRP 0.46417 29 ECT 0.17747 29 RRC 0.40684 29 RRC 0.29831 29 PREH 0.43679
30 RRC 0.46319 30 RRC 0.17044 30 ECT 0.40012 30 ALR 0.28429 30 RTRA 0.41422
31 TBM 0.41085 31 SNO 0.16702 31 TBM 0.32934 31 TBM 0.26114 31 ALT 0.39751
32 EPT 0.36135 32 TBM 0.12730 32 CEON 0.31152 32 ECT 0.19490 32 ECT 0.39008
33 ARM 0.05341 33 CEON 0.06455 33 ALR 0.17550 33 RTRA 0.00232 33 RRC 0.29623
6.4. Performance evaluation with respect to nonfinancial indicators

Taking into account the results of the companies on the non-financial indicators (CRTV,
PERS, MED, CSR, ETIC, ARTQ, EMPTH) and their weights, by applying the TOPSIS meth-
od (see Algorithm 2) we obtain the hierarchy of the companies in Table 11. As regard the
non-financial performance obtained values for the analyzed period 2011–2015, ATB stands
out clearly from the other analyzed companies as the most performing company, taking the
first place in all the years, while PREB, ALBZ, and ALT, are the worst ranked companies. The
fact that the latter mentioned companies show a zero-level of non-financial performance level
is explained by the lack of disclosure of non-financial variables that we have selected. Surpris-
ingly, CNTE, which was the best ranked company in relation to all financial performance
indicators, in terms of non-financial performance was not ranked among the best performing
companies. In the top 10 best ranked companies the pharmaceutical industry stands out by
placing ATB on the first place and BIO on the 7th place.
Table 11. Ranking of the companies in relation to all non-financial indicators (NFP)
1 ATB 0.82632 1 ATB 0.76438 1 ATB 0.80043 1 ATB 0.77539 1 ATB 0.78545
2 CMP 0.47894 2 TRP 0.55103 2 CMP 0.50898 2 CMP 0.50914 2 CMP 0.48717
3 RRC 0.42602 3 CMP 0.52583 3 ALR 0.41967 3 ALR 0.49918 3 ALR 0.39078
4 ARS 0.41602 4 RRC 0.43202 4 RRC 0.40892 4 RRC 0.48194 4 RRC 0.38881
5 ELGS 0.40252 5 MECF 0.40718 5 ELGS 0.39417 5 TRP 0.39793 5 TRP 0.37744
6 PREH 0.38206 6 ELGS 0.40490 6 TRP 0.39182 6 ELGS 0.39350 6 CEON 0.36121
7 ARTE 0.34008 7 BIO 0.38699 7 BIO 0.37709 7 BIO 0.37725 7 BIO 0.34549
8 BIO 0.34008 8 PREH 0.35746 8 ARS 0.34291 8 PREH 0.32217 8 PREH 0.33315
9 ECT 0.32035 9 ARS 0.33832 9 PREH 0.34291 9 ARS 0.32044 9 CMF 0.29676
10 MECF 0.32035 10 ECT 0.32112 10 TBM 0.31327 10 MECF 0.31303 10 ART 0.29676
11 TRP 0.32035 11 TBM 0.30219 11 MECF 0.30984 11 ECT 0.31303 11 ECT 0.28493
12 PPL 0.28196 12 CEON 0.27608 12 ECT 0.30984 12 TBM 0.30830 12 MECF 0.28493
13 SNO 0.26841 13 SNO 0.27026 13 MCAB 0.30984 13 ART 0.29782 13 ELGS 0.28056
14 TBM 0.26841 14 ART 0.26708 14 ART 0.30304 14 CMF 0.29782 14 RTRA 0.26340
15 STIB 0.24620 15 STIB 0.24911 15 CMF 0.30304 15 RTRA 0.25923 15 MCAB 0.25858
16 RTRA 0.24539 16 CMF 0.24911 16 RTRA 0.26272 16 STIB 0.24116 16 SNO 0.23941
17 ART 0.23901 17 RTRA 0.24437 17 STIB 0.24653 17 SNO 0.21517 17 TBM 0.23941
18 SCD 0.22378 18 PPL 0.23771 18 SNO 0.21971 18 SCD 0.21260 18 STIB 0.22546
19 IARV 0.17626 19 SCD 0.22889 19 ARTE 0.21231 19 ARTE 0.20723 19 SCD 0.20222
20 CBC 0.17626 20 ARTE 0.21625 20 SCD 0.21041 20 PPL 0.17245 20 ARTE 0.19400
21 EPT 0.17626 21 ALT 0.18824 21 CBC 0.17650 21 IARV 0.17245 21 PREB 0.19400
22 UAM 0.17626 22 IARV 0.17846 22 EPT 0.17650 22 MCAB 0.17245 22 PPL 0.16064
23 CNTE 0.17626 23 CBC 0.17846 23 CEON 0.17650 23 CBC 0.17245 23 IARV 0.16064
24 CEON 0.13383 24 EPT 0.17846 24 IARV 0.17650 24 UAM 0.17245 24 CNTE 0.16064
25 BRM 0.13383 25 UAM 0.17846 25 UAM 0.17650 25 CNTE 0.17245 25 CBC 0.16064
26 ARM 0.13383 26 CNTE 0.17846 26 CNTE 0.17650 26 BRM 0.13162 26 UAM 0.16064
27 MCAB 0.13383 27 BRM 0.13287 27 ARM 0.13412 27 CEON 0.13162 27 ARS 0.16064
28 ALT 0.13383 28 ARM 0.13287 28 ALT 0.13412 28 ARM 0.13162 28 BRM 0.12171
29 MECE 0.13383 29 MECE 0.13287 29 MECE 0.13412 29 MECE 0.13162 29 ARM 0.12171
30 CMF 0.00000 30 MCAB 0.13287 30 BRM 0.13412 30 EPT 0.11782 30 EPT 0.11082
31 ALBZ 0.00000 31 ALR 0.00000 31 PPL 0.13412 31 ALBZ 0.00000 31 ALBZ 0.00000
32 ALR 0.00000 32 ALBZ 0.00000 32 ALBZ 0.00000 32 ALT 0.00000 32 MECE 0.00000
33 PREB 0.00000 33 PREB 0.00000 33 PREB 0.00000 33 PREB 0.00000 33 ALT 0.00000
6.5. Performance evaluation with respect to all indicators

The weight of the financial indicators is equal to 0.702 and of the non-financial indicators is
equal to 0.298. For each company, the level of performance on financial indicators is given
in Table 10 and on non-financial indicators in Table 11. We can apply Algorithm 2 on these
values to obtain a hierarchy of companies with respect to all indicators considered in the
present study (see Table 12). As can be read from the hierarchy of companies in relation to
all financial and non-financial performance indicators for the analyzed period, 2011–2015,
the best performing company is ATB, followed by ELGS, CNTE and BIO. The least perform-
ing companies have proven to be CEON and ALT. If we look at the top ten best performing
companies, in respect with all indicators, we can observe that the best performing industry
Table 12. Final ranking of the companies in relation to all indicators (FP and NFP)
1 ATB 0.75834 1 ELGS 0.69504 1 ATB 0.66445 1 ATB 0.69443 1 ATB 0.70411
2 ELGS 0.63101 2 CNTE 0.68723 2 CNTE 0.62366 2 BIO 0.68333 2 TRP 0.58966
3 CMP 0.61214 3 MECF 0.63382 3 ELGS 0.57985 3 CNTE 0.67435 3 BIO 0.57362
4 CNTE 0.60169 4 ARM 0.62452 4 BIO 0.55202 4 ARM 0.63329 4 MCAB 0.57269
5 ARS 0.59980 5 ATB 0.60497 5 MCAB 0.52663 5 SCD 0.62739 5 CMP 0.56733
6 MECF 0.57695 6 BIO 0.57427 6 CMP 0.52521 6 ELGS 0.62096 6 ARS 0.50207
7 BIO 0.56174 7 EPT 0.55225 7 ARS 0.47970 7 CMP 0.61720 7 CNTE 0.49618
8 PREH 0.54674 8 CMP 0.55054 8 SCD 0.47801 8 MECF 0.58523 8 SCD 0.48544
9 ARTE 0.54408 9 SCD 0.51413 9 PPL 0.47377 9 TRP 0.58388 9 CEON 0.45868
10 RRC 0.54361 10 ARTE 0.50977 10 TRP 0.46383 10 MCAB 0.57437 10 ALR 0.45233
11 PPL 0.52925 11 ARS 0.48999 11 ARM 0.42718 11 ARS 0.56546 11 PPL 0.45066
12 STIB 0.51626 12 ART 0.45782 12 UAM 0.42700 12 CMF 0.53469 12 ELGS 0.44248
13 SCD 0.51445 13 STIB 0.42234 13 RTRA 0.42395 13 SNO 0.51167 13 ARTE 0.43353
14 ART 0.49413 14 BRM 0.40787 14 EPT 0.40889 14 ART 0.50837 14 ARM 0.40514
15 RTRA 0.49354 15 CMF 0.40776 15 CMF 0.40730 15 EPT 0.48436 15 MECF 0.38305
16 ECT 0.49354 16 PREH 0.40218 16 PREH 0.39805 16 IARV 0.46849 16 TBM 0.35876
17 SNO 0.49076 17 ALT 0.39487 17 ARTE 0.39724 17 ARTE 0.46344 17 IARV 0.35549
18 TRP 0.49075 18 MCAB 0.37753 18 MECF 0.39631 18 UAM 0.46283 18 PREH 0.35494
19 ALR 0.48665 19 PREB 0.37635 19 RRC 0.38886 19 STIB 0.44499 19 STIB 0.34257
20 BRM 0.46569 20 TRP 0.37375 20 ART 0.38882 20 PREH 0.44247 20 CMF 0.34144
21 CBC 0.46487 21 UAM 0.36658 21 BRM 0.36296 21 ALBZ 0.44127 21 RRC 0.33624
22 IARV 0.45735 22 ALBZ 0.36015 22 STIB 0.35766 22 BRM 0.42870 22 ART 0.32925
23 MCAB 0.45535 23 MECE 0.35353 23 MECE 0.34972 23 CBC 0.42312 23 BRM 0.30396
24 UAM 0.45409 24 IARV 0.33965 24 CBC 0.33526 24 RRC 0.42176 24 ALBZ 0.30246
25 MECE 0.43837 25 PPL 0.32778 25 ECT 0.33291 25 ALR 0.41844 25 EPT 0.29272
26 ALT 0.43220 26 CBC 0.32640 26 IARV 0.33043 26 MECE 0.39217 26 CBC 0.29122
27 TBM 0.42364 27 RRC 0.29024 27 ALBZ 0.32483 27 TBM 0.32472 27 ECT 0.29040
28 CEON 0.41009 28 ECT 0.24220 28 ALT 0.31542 28 CEON 0.31459 28 RTRA 0.28593
29 ALBZ 0.40506 29 RTRA 0.24001 29 SNO 0.29923 29 PREB 0.31210 29 SNO 0.28237
30 PREB 0.40238 30 ALR 0.23212 30 PREB 0.28521 30 PPL 0.30702 30 PREB 0.28083
31 CMF 0.39983 31 SNO 0.21037 31 TBM 0.28414 31 ALT 0.30435 31 UAM 0.28045
32 EPT 0.34263 32 TBM 0.20321 32 ALR 0.27843 32 ECT 0.27848 32 MECE 0.18245
33 ARM 0.10120 33 CEON 0.16820 33 CEON 0.19617 33 RTRA 0.16210 33 ALT 0.10796
among all the other manufacturing companies is pharmaceutical industry, represented by

ATB, BIO and SCD. As regarding the influence of selected indicators on the final ranking
of companies it should be underlined that despite the fact that financial indicators are more
relevant in assessing the performance of companies the final ranking taking into account the
total performance, showed that non-financial performance indicators are also important in
evaluating performance. Indeed, even if ATB is not always ranked in the first ten position,
in the analyzed period, with respect to the financial indicators (see Table 10) it becomes the
best performing company in relation to all indicators because of the performance on the
non-financial indicators (see Table 11). Although, CNTE was the best ranked company in
respect to all financial indicators (see Table 10), the influence of non-financial indicators is
relevant and pushed the company from the first place, but still remaining among the best
performing companies. The position of other companies is also strongly influenced by the
performance with respect to the non-financial indicators: CMP and TRP advanced from the
middle and last positions in the hierarchy with respect to financial indicators (Table 10) to
position in the top ten best ranked companies, respectively, in the final ranking (Table 12),
due to a good performance on the non-financial indicators (Table 11). On the other hand,
a weak performance with respect to non-financial indicators (see PREB) has important im-
plications on the final hierarchy. Therefore nowadays, business managers should pay more
attention and importance to non-financial performance variables and improve their mod-
els and methods of internal performance analysis. Such hierarchies of companies by their
overall performance are useful not only to managers but also to financial analysts as well as
to company shareholders from the perspective of sensitivity analysis, which can render the
influence of each indicator on total performance.
Analyzing the hierarchy of companies’ performance over the period 2011–2015 (Figure 1),
we can highlight four groups of companies: those with good performance throughout the
period (ATB, CNTE), those with poor performance (UAM, PREB), those which improved
ARM ATB ELGS

EPT 0.8 CMP
CMF CNTE
PREB 0.6 ARS
ALBZ MECF
0.4
CEON BIO 2011
TBM 0.2 PREH 2012
ALT ARTE
0 2013
MECE RRC
2014
UAM PPL
2015
MCAB STIB
IARV SCD
CBC ART
BRM RRTA
ALR TRP
SNO ECT
Figure 1. Companies’ performances trend during the analyzed period

their performance (BIO, TRP) and those that worsened their performance during the ana-
lyzed years (ALT, MECE). The changing dynamics in the hierarchy of companies during the
analyzed period is largely influenced by financial indicators but as can be seen in the final
hierarchy (Table 12), non-financial indicators have a significant influence on the position of
companies according to their overall performance. However, more in-depth analysis would
be needed to identify all the causes that generated these differences in the evolution of com-
panies’ performance.
Conclusions, limits and further research

In an increasingly competitive business environment, measuring the performance of com-
panies is a permanent management concern in order to improve the market position and
to attract new investors. Thus, the performance of companies is the most relevant indicator
when it is desired to perform comparative studies within the same industry, field of ac-
tivity or between sectors of activity. Nowadays, investments in manufacturing industry are
increasing. Therewith, performance evaluation of companies becomes more important for
managers, shareholders, investors, creditors, stakeholders, as well as for competitors in the
same industry.
The aim of this study is to evaluate the total performance of the 33 Romanian man-
ufacturing listed companies, for the period 2011–2015, in order to found out which are
the companies with the best performance. In the present paper in order to evaluate the
overall performance of the companies in the manufacturing industry, we considered the
financial performance as well as the non-financial performance. In this respect we resorted
to composite indicators. The usefulness of constructing a composite indicator that shows the
performances of the companies lies in the evaluation of these performances and in the iden-
tification of the companies that have made progress or worsened their situation during the
analyzed period. The quality of a composite indicator, as well as the solidity of the messages
it transmits, depends not only on the methodology used in its construction, but first of all on
the quality of the theoretical framework and the data used. Therefore, for measuring financial
performance (FP) we have built two complex, composite indicators, based on traditional
(AFP) and modern value-added indicators (VFP). The ROA, ROE, EPS and SOL indicators
were used to determine the composite indicator for the measurement of financial perfor-
mance through traditional indicators, and the EVA, MVA, CFROI and CVA indicators were
used to determine the composite indicator for measuring the financial performance through
value added indicators. The composite indicator for evaluating non-financial performance
(NFP) was constructed based on 7 indicators, considered significant for the listed companies
and the Romanian market. Finally, the determination of the global performance was made
based on the 2 composite indicators that measure the financial performance of the companies
(FP) and the non-financial performance (NFP).
Fuzzy AHP and TOPSIS is proposed for performance evaluation of manufacturing com-
panies. After the weights for the criteria and sub-criteria are determined using FAHP, these
are input to the TOPSIS method to rank the selected companies in respect to their financial,
non-financial and total performance.
Although, the determination of non-financial performance criteria involves subjectivity

compared to financial criteria (Secme et al., 2009) we think that the proposed method is an
efficient method in analyzing both qualitative and quantitative data and it can be success-
fully applied to performance evaluation of different entities from economy, meaning, private
companies, banks, financial institutions or other public or private entities.
According to applied FAHP, the most important financial indicators are EVA and ROA
and the most important non-financial indicators are creativity, design, innovation and per-
sonnel variables. The results of the performance evaluation of the manufacturing companies
taking into consideration financial indicators showed that the best performing companies are
CNTE and MCAB, while related to non-financial indicators the best performing company
is ATB. As regard the ranking of companies in respect to total performance, the most per-
forming company is ATB. Also, the best performing industry in respect to all performance
indicators for the analyzed period, from 2011 to 2015, is the pharmaceutical industry. At the
same time, the companies’ hierarchy related to all financial indicators is sensitively influenced
by accounting based, traditional financial indicators.
As a main conclusion that can be draw from analyzing the results is that not only financial
performance, but also non-financial performance indicators should be taken into consider-
ation in the process of total performance evaluation of companies, due to the fact that com-
panies are performing in a very competitive environment. Compared to other similar studies
(Rezaie et al., 2014; Moghimi et al., 2013; Ertugrul & Karakasoglu, 2009; Yalcin et al., 2012)
we used not just financial indicators to evaluate performance of companies, but also non-fi-
nancial indicators. As Manes-Rossi et al. (2018) highlighted, in regard to non-financial dis-
closure of biggest European companies, particular attention is devoted in our times to social,
employee and environmental matters. From this point of view, our study is part of current
research trends in corporate reporting and disclosure practices and performance evaluation.
The model proposed for assessing the overall performance of companies can serve as a
tool for monitoring performance, taking into consideration not only the financial dimension
of performance but also the social and environmental issues, too. For these reasons we con-
sider that the approach can be used by small and medium entities, banks or other organiza-
tions in their aim to measure and evaluate performance trends over the years.
We are aware of the limits of our study. These can be found in the subjective choices of
triangular fuzzy numbers, in the subjectivity of the selection process of the used indicators to
evaluate the total performance of companies and finally in the sample selection process of the
companies included in our study. On the other hand, the present study could be continued
by considering companies from other industries and/or other years. Moreover, the results
displayed in Tables 8–12 could be subject of a further processing.
Author contributions
Authors who contributed to the work had the following contributions: A.B. and V.B. con-
ceived the study and were responsible for the design and development of the data analysis,
V.B., O.B. and D.T. were responsible for data collection and analysis, A.B., V.B. and D.T. were
responsible for data interpretation, D.S.P. and V.B. selected the indicators and wrote the first
section, A.B wrote the first draft of the article. A.B., D.T. and V.B. revised the paper.
Acknowledgements
We would like to express our thanks to anonymous reviewers who have contributed to im-
prove this article.
Disclosure statement
Authors do not have any competing financial, professional, or personal interests from other
parties.
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Technological and Economic Development of Economy

ISSN: 2029-4913 / eISSN: 2029-4921

PERFORMANCE EVALUATION MODEL OF ROMANIAN

Adrian Ioan BAN 1, Olimpia Iuliana BAN 2, Victoria BOGDAN 3*,

JEL Classification: L25, M21, M41, C60, C63.

*Corresponding author. E-mail: [email protected]

© 2020 The Author(s). Published by VGTU Press

1. Measuring companies’ performance by financial and nonfinancial indicators

1.1. Financial indicators

Traditional indicators (accounting based indicators)

MVA = MV–TIC, (6)

CVA = GI ⋅ ( CFROI-WACC ) , (8)

1.2. Nonfinancial indicators

2. Triangular fuzzy numbers

Table 1. Linguistic variables expressed by triangular fuzzy numbers

Linguistic variables Triangular fuzzy number Reciprocal triangular fuzzy number

3. FAHP and TOPSIS methods

3.1. FAHP algorithm for determining the weights of indicators

Step 3: For i ∈ {1,..., n} compute

3.2. TOPSIS algorithm for determining the ordering of a set of companies

Step 2: For i ∈ {1,..., n} , j ∈ {1,..., J } compute

Step 4: For j ∈ {1,..., J } compute

Step 5: For j ∈ {1,..., J } compute

4. Weights of indicators by FAHP

Indicators EVA MVA CFROI CVA

4.2. Weights of accounting based indicators

Indicator ROA ROE EPS SOL

4.3. Weights of non-financial indicators

Indicators CRTV PERS MED CSR ETIC ARTFQ EMPTH

4.4. Weights of categories of indicators

Indicator VFP AFP

5. Sample and data collection

Table 7. Selected Romanian manufacturing listed companies

No. Company BSE Code

6. Performance evaluation of companies

Table 8. Ranking of the companies in relation to VFP indicators

6.2. Performance evaluation with respect to traditional accounting indicators

Table 9. Ranking of the companies in relation to AFP indicators

6.3. Performance evaluation with respect to all financial indicators

6.4. Performance evaluation with respect to nonfinancial indicators

6.5. Performance evaluation with respect to all indicators

among all the other manufacturing companies is pharmaceutical industry, represented by

ARM ATB ELGS

TBM 0.2 PREH 2012

Figure 1. Companies’ performances trend during the analyzed period

Conclusions, limits and further research

Although, the determination of non-financial performance criteria involves subjectivity

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