The Position of Balanced Scorecard in Stock Selection Decision Making Using PAPRIKA Technique

The main aim of this paper is to examine the role of financial and non-financial criteria of balanced scorecard in portfolio selection using modern technique of Potentially Pairwise Rankings of all possible Alternatives (PAPRIKA), from the view point of professional and non-professional investors. To this purpose and through theoretical literature, and by adaption of factor analysis method effective factors were identified and chosen in stock selection. Then with respect to responding of professional and non-professional investors to the questions, and using of PAPRIKA multivariate decision making model by them, these criteria were ranked. Initially, 60 variables were used in this study and then after conducting exploratory factor analysis they were reduced to 29 factors. The results of this study indicate that the first six variables effective on stock selection for professional investors respectively include variables of profitability growth, solvency, return, return on assets and equity, customer’s satisfaction, price-to-earnings ratio; and for the non-professional investors, they comprise of price-to-earnings ratio, return, profitability growth, solvency, return on assets and equity, di-rectors' ability. Similarly, the results of the study show that compared to non-professional investors, professional investors attach more importance for non-financial criteria of balanced scorecard.