Open AccessAPPLYING FUZZY MCDM FOR FINANCIAL PERFORMANCE EVALUATION OF IRANIAN COMPANIES
Author(s) -
Abdolhamid Safaei Ghadikolaei,
Saber Khalili Esbouei,
Jurgita Antuchevičienė
Publication year - 2014
Publication title -
technological and economic development of economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.634
H-Index - 47
eISSN - 2029-4921
pISSN - 2029-4913
DOI - 10.3846/20294913.2014.913274
Subject(s) - fuzzy logic , economic value added , analytic hierarchy process , stock exchange , financial ratio , multiple criteria decision analysis , computer science , business , pairwise comparison , value (mathematics) , accounting , operations research , profit (economics) , economics , finance , mathematics , microeconomics , artificial intelligence , machine learning
Financial performance evaluation is very important in a highly competitive business environment. Accordingly, an accurate and appropriate performance evaluation is critical. Financial performance indicators reflect the competitiveness of a company and they must be carefully identified in the evaluation process. Generally, accounting measures are used for performance evaluation. However, these measures are not sufficient for performance evaluation in the today’s competitive economy. Therefore, value based measures have recently been introduced to express the company value. In this study, a hybrid approach is proposed for financial performance evaluation of automotive companies of Tehran stock exchange (TSE). For this purpose, a hierarchical financial performance evaluation model is structured based on the accounting measures and economic value measures. In this approach Fuzzy Analytic Hierarchy Process (FAHP) is applied to determine weights of criteria. Then the companies are ranked by using Fuzzy VIKOR (VlseKriterijumska Optimizacija I Kompromisno Resenje (in Serbian), Fuzzy Additive Ratio Assessment (ARAS-F) and Fuzzy Complex Proportional Assessment (Fuzzy COPRAS), simultaneously. Also results of three outranking methods are combined by using the mean ranks. The results represented the highest importance of economic value measures than accounting measures in financial performance evaluation of companies. Six companies were ranked applying the proposed approach.