An Expert System for Evaluating the Financial Performance of Construction Companies

The construction sector significantly contributes to any nation’s economic development. The construction sector contributes significantly to providing new job opportunities and domestic investment. Previous research suggests that the construction sector has experienced a rise in financial failures, the construction sector has the second-highest average rate of business failures. With that in mind, understanding the effectiveness of the financial behavior of a construction company is necessary to improve the internal management practices that control its survival. In this paper, a theoretical regression model was created to predict the profitability of construction firms. Moreover, the predictive model was designed to build a suggestion framework to examine the effect of four independent dimensions which are Internal Management Practices MP, Owner Manager Characteristics OMC, Company Features CC, and Construction Practices CMP on the profitability of construction firms represents the model’s dependent variable. Each variable was selected from the literature and consists of a set of items related to the factors that affect the performance of construction firms. The Return On Equity ROE was used as the dependent variable in the regression model. The value of the dependent variable was collected from the financial statements of selected construction companies between 2015 and 2020. The variables were analyzed using a web-based formal standardized questionnaire addressed to medium-sized construction companies. The regression model results showed that MP and CMP predict the financial behavior of construction companies. Based on the findings of this study, several recommendations have been proposed to promote the construction sector to improve financial performance.