EFFICIENCY EVALUATION OF UKRAINIAN LEASING COMPANIES USING DEA MODELS

Abstract

The article proposed a series of input-oriented DEA (data envelopment analysis) models with variable VRS (variable returns to scale) and constant CRS (constant returns to scale) scale effects to assess the performance of Ukrainian leasing companies. Based on the obtained DEA models, an efficiency analysis of these companies scale of operation was also conducted. Performance assessments based on the DEA methodology were obtained using the Efficiency Measurement System (EMS) package. The analysis showed that the assessment of the leasing companies’ performance based on DEA models issensitive to the choice of input and output variables. Therefore, to obtain a comprehensive assessment of efficiency, we used the average of the corresponding technical efficiency values for different sets of input and output variables. Current liquidity ratios, receivables, aggregate assets and profitability ratios, namely net income, net income and other operating income, were used as output variables in the various DEA models. The input variables were total assets, administrative expenses and other operating expenses, fixed assets and intangible assets, cost of goods sold and other expenses. It has been argued that input-oriented DEA models are more suitable for analyzing the effectiveness of the leasing business, as the management of such companies has much more capability to control inputs such as labor, costs, interest rate policy, equity, etc. than output (the amount of leasing agreements, company income, etc.). To obtain performance estimates based on DEA models, a statistical sample was formed based on the accounting and financial statements of domestic leasing companies participating in the Ukrainian Association of Lessors for 2019 and 2020. Analysis based on the obtained DEA models showed that, despite the high growth rates of leasing operations in the second half of 2020, leasing companies demonstrated a bit higher efficiency in 2019.