Evaluation of the Effects of Naphtha and Ethylene Prices on the Performance of Petroleum Companies


Creative Commons License

Ergül N.

Interciencia, vol.48, no.7, pp.49-61, 2018 (Refereed Journals of Other Institutions)

  • Publication Type: Article / Article
  • Volume: 48 Issue: 7
  • Publication Date: 2018
  • Title of Journal : Interciencia
  • Page Numbers: pp.49-61

Abstract

Abstract

The financial performances of petroleum companies that operate in countries with insufficient petroleum resources, such as Turkey, are significantly affected by fluctuations in exchange rates and the prices of naphtha and ethylene. This study investigated the impact on petroleum companies’ financial performance of the price changes in naphtha and ethylene between 2011 and 2017. The dataset of the study included financial statements from five companies that operate in the Turkish petroleum sector and are traded on the Borsa Istanbul (BIST). TOPSIS was employed to facilitate multi-criteria decision-making in assessing the performance of these companies. The results showed that, in between 2011-2017 years, the petroleum companies traded on the BIST achieved high gross profitability, in the years when the naphtha and ethylene price difference increased. On the other hand, the petroleum companies which only increased their equity capital, continued to increase their gross profitability in the years when the naphtha–ethylene price difference decreased. 

 Keywords: TOPSIS, Firm Performance Analysis, Petroleum. JEL Classification: C18, L25, L83, M2