A multicriteria approach for evaluating the performance of industrial firms

doi:10.1016/0305-0483(92)90021-X

Omega

Volume 20, Issue 4, July 1992, Pages 467-474

https://doi.org/10.1016/0305-0483(92)90021-X Get rights and content

Abstract

Multivariate techniques have been widely used for the explanation and prediction of the firm's behaviour. However, in practice, the comparative evaluation and ranking of companies is usually based on the consideration of a single measure of corporate success. But the definition of the most appropriate measure gave rise to a considerable debate. This paper tries to utilise the results of a multicriteria analysis, applied to a large sample of Greek pharmaceutical industries, in order to indicate how suitable some common financial ratios are as indices of the firm's overall performance. The results show that profitability constitutes the most representative measure for the differentiation and ranking of companies. Labour productivity and market share are the best indicators of the business' success, while business' failure is more closely related to ratios indicating long- and short-term solvency. This means that a sound capital structure is a necessary but not a sufficient enough condition to ensure the profitable and effective operation of the firm.

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Main paperA multicriteria approach for evaluating the performance of industrial firms

Abstract

Omega

Omega

Omega

Omega

Omega

The analysis of financial ratios: A review article

J. Bus. Fin. Acctng

System Analysis and Project Management

Assessing corporate performance

Bus. Strategy Rev.

Applied Productivity Analysis for Industry

The Art of Reckoning

Main paper
A multicriteria approach for evaluating the performance of industrial firms