Profitability measurement of UK theme parks: an aggregate approach

Traditionally, financial ratios were used for profitability measurement. This research attempts to apply data envelopment analysis (DEA) to aggregate various financial ratios into a composite profitability index. The research sample includes 13 parks managed by 10 leading theme park operators in the UK. The result first reveals that multi‐site operators are significantly more profitable than their single‐site rivals. Furthermore, the consistency between DEA and ratio analysis indicates that DEA can be used as a good proxy of ratio analysis. It is hoped that this approach can provide new insights about financial measurement not available to managers through ratio analysis.