Application of multi criteria decision making methods for financial performance evaluation of companies traded on Tehran Stock Exchange

Financial performance evaluation is very important in a highly competitive environment for companies, so an accurate and appropriate performance evaluation is critical. financial performance indicators must be carefully identified in the evaluation process because they reflect the competitiveness of a company. In this study, a hybrid approach of multicriteria decision making method is proposed for financial performance evaluation of automobile producer group companies of Tehran stock exchange (TSE). In this study for this purpose, with help of financial experts, a hierarchical financial performance evaluation model is structured based on the accounting based financial measures and value based financial measures (modern financial measures). In this quantitative approach fuzzy analytic hierarchy process (FAHP) was applied to determine the weight of the criteria and then the companies are ranked by using VIseKriterijumska KOmpromisno Rangiranje (VIKOR), Additive Ratio Assessment (ARAS) and Complex Proportional Assessment (COPRAS), simultaneously. The results represented the results represented the highest important of value based measures than accounting measures, also results of three outranking methods are almost identical and the results was combined to obtain final ranks.