Using fanp and fuzzy vikor for ranking manufacturing companies based on their financial performance

Abstract

In the current study a hybrid approach is proposed for financial performance evaluation of manufacturing companies. With respect to inner dependence between financial measures, an analytic structure based on the accounting measures and economic value measures is proposed. Also, based on a type of initial information, it is proposed to evaluate financial performance of companies by applying MCDM (Multiple Criteria Decision Making) methods under fuzzy environment. In this approach Fuzzy Analytic Network Process (FANP) is applied to determine relative significances of multiple criteria used in accounting measures and economic value measures. Then companies are ranked by using Fuzzy VIKOR (VlseKriterijumska Optimizacija I Kompromisno Resenje; in Serbian) method. In the presented case study, 143 Iranian companies in 14 manufacturing industries that trade on Tehran stock exchange (TSE) are ranked applying the proposed approach. The results represent the importance of hybrid measures in financial performance evaluation of companies.