TOPSIS BASED DECISION MAKING FOR FINANCIAL PERFORMANCE IN MALAYSIA RENEWABLE ENERGY SECTOR

Abstract

methods to evaluate the financial performance of industry players. This study utilizes the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), a multi-criteria decision-making (MCDM) approach, to assess and rank 27 renewable energy companies based on 2024 financial data obtained from Datastream. Key financial indicators return on assets (ROA), return on equity (ROE), net profit margin, current ratio, and debt-to-equity ratio were used to construct a composite performance index.

Financial data were normalized, and criteria were weighted using both equal and expert-based approaches to ensure robustness. The TOPSIS model was applied to measure each company’s relative closeness to an ideal performance benchmark. Results showed significant variation in financial performance, with top-ranking firms displaying stronger profitability and financial balance. Larger and more diversified companies generally outperformed smaller peers.

The study offers a practical, replicable framework for evaluating financial efficiency in the renewable energy sector. It provides useful insights for investors, policymakers, and corporate decision-makers seeking data-driven tools for strategic planning and sustainability-oriented investment decisions