Application of TOPSIS Technique for Financial Performance Evaluation of Technology Firms in Istanbul Stock Exchange Market

For nearly thirty years, technology has been the fastest-growing sector in Turkey where firms centering on software creations, information technology and electronic products prevail. In today's increasingly competitive environment, an accurate and appropriate evaluation of financial performance bears considerable significance for a firm that targets to successfully maintain her market position and protect their market shares against potential risks in the future. This paper aims to propose a multi-criteria decision-making model to measure and compare the financial performance of thirteen technology firms trading in Istanbul Stock Exchange. These firms are examined and assessed in terms of ten financial ratios which are combined to obtain a financial performance score by using Technique for Order Preference by Similarity to Ideal Solution Methods (TOPSIS). TOPSIS helps to rank these firms for three-year time period between 2009 and 2011. This study will find out whether the ranking results of TOPSIS and the ranking results of the firms' market value in question overlap or not. (C) 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of Prof. Dr. Huseyin Arasli