Does Profit Paradigm Shift? A Comparative Analysis of the Impact of Divestment on Financial Performance Using Non-Parametric and Artificial Neural Network Model

The study investigates the impact of social divestment on foreign brands profitability as an aftermath of the ongoing Israel-Gaza conflict. A comparative analysis of profitability metrics for foreign brands before and after divestment initiatives, leveraging traditional financial ratios alongside advanced artificial neural network (ANN) models is used to assess the repercussions. The study utilizes data from Bloomberg, focusing on stocks listed in maj or indices (Dow Jones, FTSE 100, ASX 200, and E500) and analyses financial performance through financial and market measures proxies viz. Return on Assets (ROA), Price-Earnings Ratio (PE), and Tobin's Q. Findings from both the analytical techniques reveal a significant positive impact on financial performance, with profitability metrics showing notable positive changes post-divestment. The combination of statistical evidence with the ANN analysis confirms the authenticity of results, indicating that divestments need not lead to irreparable losses, as corporates find competitive strategies to enhance brand reputation and market performance.