scholarly journals The influence of efficiency estimates on the financial ratios of South African listed banks

2009 ◽  
Vol 3 (2) ◽  
pp. 133-152
Author(s):  
Merwe Oberholzer ◽  
Gert Van der Westhuizen
Keyword(s):  
South African ◽  
Practical Implication ◽  
Financial Statement ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Investment Activity ◽  
Significant Relationships ◽  
Dea Models ◽  
Dea Efficiency

The purpose of this study is to determine the relationship between bank efficiency estimates, measured by Data Envelopment Analysis (DEA), and bank performance, measured by the financial ratios included in the Du Pont analysis. Annual financial statement reports were used to calculate the performance of listed banks on the JSE Limited over a ten-year period. This study is the first to use two unique DEA models: one focuses on the efficiency of the finance and investment activity, and the other on the efficiency of the operating activity of banks. The study found that the majority of significant relationships between efficiency estimates and financial ratios are negatively correlated. Further research is needed to explain this phenomenon. The practical implication of this study is that it indicates that an improvement in the DEA efficiency estimates will not necessarily result in better financial ratios. Therefore, both measurements should be used to evaluate different aspects of performance in order to stay competitive.

scholarly journals Bank Efficiency And Financial Ratios: Rating The Performance Of The Four Largest South African Banks

2013 ◽  
Vol 30 (1) ◽  
pp. 93 ◽  
Author(s):  
Gerhardus Van der Westhuizen
Keyword(s):  
South African ◽  
Financial Statements ◽  
Performance Measure ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Return On Assets ◽  
Bank Efficiency ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Two Sides

Data Envelopment Analysis (DEA) in conjunction with financial ratios is used to estimate and compare the performance of the four largest South African banks over the period 2001 to 2011. DEA is used to estimate the relative technical, allocative, cost and scale efficiencies and compare these estimates to certain financial ratios published by the banks in their financial statements. These ratios include return on equity (ROE), return on assets (ROA), net interest margin (NIM), impairment losses, etc. The results obtained from the efficiency estimates and the financial ratios are used to rate the banks according to these performances. The rating differs depending on which performance measure is applied. A combination of these measures was necessary to determine the best and the worst performing bank. From the results obtained it appears that profitability and efficiency are two sides of the same coin.

Penilaian Efisiensi Bank dengan Data Envelopment Analysis pada 10 Bank Berperingkat Besar di Indonesia

2015 ◽  
Vol 2 (02) ◽  
pp. 113-126
Author(s):  
J.M.V. Mulyadi
Keyword(s):  
Data Envelopment Analysis ◽  
Detailed Analysis ◽  
Jel Classification ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Efficiency Assessment ◽  
Production Approach

A B S T R A C T Bank efficiency are important in the assessment of the health of banks. Data Envelopment Analysis is a model of efficiency assessment bank that is widely used because it provides a more detailed analysis of the results compared to financial ratios. Analysis carried out by the production approach, intermediation, revenues and profits. This study assesses the 10 major banks in Indonesia. The results showed that of the 10 large banks are still found inefficiencies. DEA resulted in a recommendation that development can be done bank to achieve optimum efficiency. Based on the recommendation expected the bank to maximize the desired profit through efficiency. A B S T R A K Efisiensi bank merupakan hal penting dalam penilaian kesehatan bank. Data Envelopment Analysis adalah model penilaian efisiensi bank yang banyak digunakan karena memberikan hasil analisis yang lebih detil dibandingkan rasio keuangan. Analisi dilakukan dengan pendekatan produksi, intermediasi, pendapatan dan laba. Penelitian ini melakukan penilaian pada 10 bank besar di Indonesia. Hasil penelitian menujukkan bahwa dari 10 bank besar tersebut masih ditemukan inefisiensi. DEA menghasilkan rekomendasi pengembangan yang dapat dilakukan bank untuk mencapai efisiensi optimum. Berdasarkan rekomendasi tersebut diharapkan bank dapat memaksimumkan profit yang diinginkan melalui efisiensi. JEL Classification: G29, O33

scholarly journals Large discreet resource allocation: a hybrid approach based on dea efficiency measurement

2008 ◽  
Vol 28 (3) ◽  
pp. 597-608 ◽  
Author(s):  
Eliane Gonçalves Gomes ◽  
João Carlos Correia Baptista Soares de Mello ◽  
Lidia Angulo Meza
Keyword(s):  
Resource Allocation ◽  
Hybrid Approach ◽  
Data Envelopment ◽  
Efficiency Measures ◽  
Starting Point ◽  
Computational Work ◽  
Research Problems ◽  
Dea Models ◽  
Dea Efficiency ◽  
Zero Sum

Resource allocation is one of the traditional Operations Research problems. In this paper we propose a hybrid model for resource allocation that uses Data Envelopment Analysis efficiency measures. We use Zero Sum Gains DEA models as the starting point to decrease the computational work for the step-bystep algorithm to allocate integer resources in a DEA context. Our approach is illustrated by a numerical example.

scholarly journals Efficiency versus Maqashid Sharia Index: an Application on Indonesian Islamic Bank

2018 ◽  
Vol 2 (2) ◽  
Author(s):  
Aam S. Rusydiana ◽  
Irman Firmansyah
Keyword(s):  
Data Envelopment Analysis ◽  
Banking Industry ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Islamic Bank ◽  
Market Inefficiency ◽  
Efficiency Performance ◽  
Dea Efficiency ◽  
Dea Method

The Development of Islamic Banking Industry in Indonesia relatively shows a good tendency. In the market, inefficiency would be the great obstacles in head to head to conventional bank. Despite of efficiency performance in Islamic Bank, Islamic Bank also must have sharia compliance performance. So it needed to identified the efficiency of Islamic Bank in Indonesia and the achievement of Maslahah in term of three aspects, there are education, the creating of justice, and the attainment of welfare. This study would try to measure the efficiency of Islamic Banking Industry with Data Envelopment Analysis (DEA) method and also to evaluate the performance by using Maqasid Sharia Index (MSI). Banxia Frontier Analyst 3.1 used in the data calculation. The calculation of the level of Islamic Bank efficiency in this study are relative, not absolute. Result of this study indicate four main findings, first, Islamic bank involve in quadran 1 is Islamic bank who reached the highest efficiency and the best performance; there are BMI and Bank Panin Sharia. Islamic bank involve in quadran 2 is Islamic bank who reached the highest efficiency and the lowest performance, there are BSM, Maybank Sharia, and Bank Sharia Bukopin. Islamic bank involve in quadran 3 is Islamic bank who reached the lowest efficiency and have a good performance, there are BRI sharia, and BCA sharia. Islamic bank involve in quadran 4 is Islamic bank who reached the lowest efficiency and the lowest performance, there are Bank Mega Sharia, Victoria Sharia, BNI Sharia, and BJB Sharia.Keywords: Maqasid Index, Efficiency, DEA, Efficiency-Maqasid Quadrant (EMQ) 

scholarly journals Effects of Macroeconomics Factors toward Efficiency in Banking

JEJAK ◽  
2018 ◽  
Vol 11 (2) ◽  
pp. 390-400 ◽  
Author(s):  
Faaza Fakhrunnas ◽  
Faiza Husnayeni Nahar ◽  
Hilman Fikri Albana
Keyword(s):  
Data Envelopment Analysis ◽  
Interest Rate ◽  
Growth And Development ◽  
Financial Statement ◽  
Islamic Banking ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Bank Efficiency ◽  
Macroeconomic Factors ◽  
Conventional Banks

The main objective of this study is to analyze the effect of macroeconomic factors toward efficiency in Islamic and Conventional Banking. Banking as one of components in financial system that highly contributes to the growth and development of the economy in a country, especially after establishment of the first Islamic bank in Indonesia at the year of 1992. Afterwards, Islamic banking began to develop and start to compete with conventional banking. Hence, in order to survive and do fair competitiveness, Islamic and Conventional banking have to maintain its efficiency. This study uses the methodology of Data Envelopment Analysis (DEA). This study also analyze the macroeconomics factors namely inflation, interest rate of Bank indonesia and the growth of Gross Domestic Product (GDP) which affects the bank efficiency. Our data is obtained from annual financial statement published by each islamic and conventional bank and Bank Indonesia starting from 2007 to 2016. This study shows that conventional banks have higher efficiency than Islamic banks, while crisis in 2008 had no significant effect on the efficiency of Islamic and conventional banking. However, a decrease in the level of efficiency that occurs in conventional banking indicates that conventional banking is more sensitive to the crisis.

Randomizing DEA Efficiency Scores with Beta Distribution

2014 ◽  
pp. 1977-1985
Author(s):  
P. Sunil Dharmapala
Keyword(s):  
Data Envelopment Analysis ◽  
Order Statistic ◽  
Beta Distribution ◽  
Data Envelopment ◽  
Random Errors ◽  
Input Output ◽  
Stochastic Dea ◽  
Dea Models ◽  
Dea Efficiency ◽  
Statistical Results

A criticism leveled against Data Envelopment Analysis (DEA) is that it is incapable of handling input/output data contaminated with random errors, and therefore, efficiency scores reported by DEA do not reflect reality. Several researchers have addressed this issue by incorporating statistical noise into DEA modeling, thus giving birth to Stochastic DEA. In this chapter, utilizing well known DEA models, we propose a method to randomize efficiency scores by treating each score as an order statistic of an underlying Beta distribution. In an application to a set of banks, we demonstrate how to do this randomization and derive some statistical results.

scholarly journals Penilaian Efisiensi Bank dengan Data Envelopment Analysis pada 10 Bank Berperingkat Besar di Indonesia

2015 ◽  
Vol 2 (02) ◽  
pp. 113-126
Author(s):  
J.M.V. Mulyadi
Keyword(s):  
Data Envelopment Analysis ◽  
Detailed Analysis ◽  
Jel Classification ◽  
Financial Ratios ◽  
Data Envelopment ◽  
Bank Efficiency ◽  
Efficiency Assessment ◽  
Production Approach

A B S T R A C T Bank efficiency are important in the assessment of the health of banks. Data Envelopment Analysis is a model of efficiency assessment bank that is widely used because it provides a more detailed analysis of the results compared to financial ratios. Analysis carried out by the production approach, intermediation, revenues and profits. This study assesses the 10 major banks in Indonesia. The results showed that of the 10 large banks are still found inefficiencies. DEA resulted in a recommendation that development can be done bank to achieve optimum efficiency. Based on the recommendation expected the bank to maximize the desired profit through efficiency. A B S T R A K Efisiensi bank merupakan hal penting dalam penilaian kesehatan bank. Data Envelopment Analysis adalah model penilaian efisiensi bank yang banyak digunakan karena memberikan hasil analisis yang lebih detil dibandingkan rasio keuangan. Analisi dilakukan dengan pendekatan produksi, intermediasi, pendapatan dan laba. Penelitian ini melakukan penilaian pada 10 bank besar di Indonesia. Hasil penelitian menujukkan bahwa dari 10 bank besar tersebut masih ditemukan inefisiensi. DEA menghasilkan rekomendasi pengembangan yang dapat dilakukan bank untuk mencapai efisiensi optimum. Berdasarkan rekomendasi tersebut diharapkan bank dapat memaksimumkan profit yang diinginkan melalui efisiensi. JEL Classification: G29, O33

Measuring Performance of a Three-Stage Network Structure Using Data Envelopment Analysis and Nash Bargaining Game: A Supply Chain Application

2018 ◽  
Vol 17 (05) ◽  
pp. 1429-1467 ◽  
Author(s):  
Mohammad Amirkhan ◽  
Hosein Didehkhani ◽  
Kaveh Khalili-Damghani ◽  
Ashkan Hafezalkotob
Keyword(s):  
Supply Chain ◽  
Data Envelopment Analysis ◽  
Nash Bargaining ◽  
Data Envelopment ◽  
Second Stage ◽  
Proposed Model ◽  
Nash Bargaining Game ◽  
Dea Models ◽  
Overall Efficiency

The issue of efficiency analysis of network and multi-stage systems, as one of the most interesting fields in data envelopment analysis (DEA), has attracted much attention in recent years. A pure serial three-stage (PSTS) process is a specific kind of network in which all the outputs of the first stage are used as the only inputs in the second stage and in addition, all the outputs of the second stage are applied as the only inputs in the third stage. In this paper, a new three-stage DEA model is developed using the concept of three-player Nash bargaining game for PSTS processes. In this model, all of the stages cooperate together to improve the overall efficiency of main decision-making unit (DMU). In contrast to the centralized DEA models, the proposed model of this study provides a unique and fair decomposition of the overall efficiency among all three stages and eliminates probable confusion of centralized models for decomposing the overall efficiency score. Some theoretical aspects of proposed model, including convexity and compactness of feasible region, are discussed. Since the proposed bargaining model is a nonlinear mathematical programming, a heuristic linearization approach is also provided. A numerical example and a real-life case study in supply chain are provided to check the efficacy and applicability of the proposed model. The results of proposed model on both numerical example and real case study are compared with those of existing centralized DEA models in the literature. The comparison reveals the efficacy and suitability of proposed model while the pitfalls of centralized DEA model are also resolved. A comprehensive sensitivity analysis is also conducted on the breakdown point associated with each stage.

scholarly journals Dealing with Interval DEA Based on Error Propagation and Entropy: A Case Study of Energy Efficiency of Regions in China Considering Environmental Factors

2015 ◽  
Vol 3 (6) ◽  
pp. 538-548 ◽  
Author(s):  
Jianping Fan ◽  
Weizhen Yue ◽  
Meiqin Wu
Keyword(s):  
Energy Efficiency ◽  
Environmental Factors ◽  
Error Propagation ◽  
Interval Data ◽  
Data Envelopment ◽  
Exact Data ◽  
Dea Models ◽  
Traditional Approaches ◽  
Decision Making Units

AbstractThe conventional data envelopment analysis (DEA) measures the relative efficiency of decision making units (DMUs) consuming multiple inputs to produce multiple outputs under the assumption that all the data are exact. In the real world, however, it is possible to obtain interval data rather than exact data because of various limitations, such as statistical errors and incomplete information, et al. To overcome those limitations, researchers have proposed kinds of approaches dealing with interval DEA, which either use traditional DEA models by transforming interval data into exact data or get an efficiency interval by using the bound of interval data. In contrast to the traditional approaches above, the paper deals with interval DEA by combining traditional DEA models with error propagation and entropy, uses idea of the modified cross efficiency to get the ultimate cross efficiency of DMUs in the form of error distribution and ranks DMUs using the calculated ultimate cross efficiency by directional distance index. At last we illustrate the feasibility and effectiveness of the proposed method by applying it to measure energy efficiency of regions in China considering environmental factors.

Rationality, accounting and benchmarking water businesses

2018 ◽  
Vol 31 (3) ◽  
pp. 290-315 ◽  
Author(s):  
Nicholas Pawsey ◽  
Jayanath Ananda ◽  
Zahirul Hoque
Keyword(s):  
Economic Efficiency ◽  
Fair Value ◽  
Water Utilities ◽  
Future Research ◽  
Data Envelopment ◽  
Water Utility ◽  
Capital Input ◽  
Content Type ◽  
Dea Models ◽  
Future Work

Purpose The purpose of this paper is to explore the sensitivity of economic efficiency rankings of water businesses to the choice of alternative physical and accounting capital input measures. Design/methodology/approach Data envelopment analysis (DEA) was used to compute efficiency rankings for government-owned water businesses from the state of Victoria, Australia, over the period 2005/2006 through 2012/2013. Differences between DEA models when capital inputs were measured using either: statutory accounting values (historic cost and fair value), physical measures, or regulatory accounting values, were scrutinised. Findings Depending on the choice of capital input, significant variation in efficiency scores and the ranking of the top (worst) performing firms was observed. Research limitations/implications Future research may explore the generalisability of findings to a wider sample of water utilities globally. Future work can also consider the most reliable treatment of capital inputs in efficiency analysis. Practical implications Regulators should be cautious when using economic efficiency data in benchmarking exercises. A consistent approach to account for the capital stock is needed in the determination of price caps and designing incentives for poor performers. Originality/value DEA has been widely used to explore the role of ownership structure, firm size and regulation on water utility efficiency. This is the first study of its kind to explore the sensitivity of DEA to alternative physical and accounting capital input measures. This research also improves the conventional performance measurement in water utilities by using a bootstrap procedure to address the deterministic nature of the DEA approach.

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