Tehran Stock Exchange

Tehran Stock Exchange, it appears crucial to provide a method that can facilitate the issue
meanwhile being highly reliable. Making decisions by considering a number of criteria, each
of which has a special place, can be possible only by using multi-criteria decision-making
models. Various indicators tailored to the type of ranking are used in these methodS
(IRAQI, 2008).
Therefore, financial evaluation and ranking the companies can be done by considering
financial ratios as indicators, Stock Exchange companies as options and the use of multi-
criteria decision-making methods. The aim of this research was to provide a decision-
making model to investigate and evaluate the financial performance of the stock market
companies by using their financial ratios and also to achieve the decision makers' thematic
judgments.
To do so, a combined method (Fuzzy Analytical Hierarchical Process (FAHP) and TOPSIS)
was used. These two methods are recognized as the most important and most widely used
decision-making methods and their combination is expected to deliver optimal results.
Nowadays, following the competitiveness of the global economy and increased public
awareness of financial and investment issues, the capital market has drawn the attention
more than ever.
On the other hand, to capture the attention of investors, most companies are trying to
produce high quality goods and services with lower costs. Meanwhile, a number of
companies try to show a favorable image of their company status by providing unrealistic
and misleading information to keep themselves at the competition scene in attracting the
investors. Hence, measuring the performance of companies with appropriate and diverse
indicators as well as rating them based on these indices seem to be important and
beneficial to the investors.
The performance appraisal with respect to the development of capital markets is among the
major issues regarded by the stakeholders, creditors, governments and managers. The
investors always tend to be informed of the success of managers in using their capitals
(MAHMOOD; SHAHABDIN; JAFAR, 2010). Financial ratios are the most useful indicator for
the performance and the financial status of the company (ÍRFAN; NILSEN, 2007).
However, ranking by considering several criteria that each have a special place only can
occur by applying the multi-criteria decision-making models. Various
[http://creativecommons.org/licenses/by/3.0/us/] Licensed under a Creative Commons Attribution 3.0 United States License 515
INDEPENDENT JOURNAL OF MANAGEMENT & PRODUCTION (IJM&P)
http://www.ijmp.jor.br v. 10, n. 2, March - April 2019 ISSN: 2236-269X DOI:
10.14807/ijmp.v10i2.859
indicators are used tailored to the type of ranking in these methods (MASOUMEH; ZERR,
2009). Hence, using five financial ratios as indicators and employing the multi-criteria
decision making methods, we can financially evaluate and rate the companies listed on the
Stock Exchange. Accurate assessment of companies in the industries can be a full mirror of
the status of different companies compared to their competitors, revealing their internal
strengths and weaknesses as well as their external opportunities and threats (KASHAN, et
al. 2004).
The evaluation of companies plays a major role in the industry. Introducing industry-leading
companies specifies their position in a competitive environment based on various indicators
or variables. This, on the one hand, makes the weak companies to distinguish their distance
from the top ones to develop an appropriate strategy to reach them. On the other hand, the
top companies will strengthen their superiority by defining their proper plans and strategies.
The capital formation is assumed the most important factor in economic development from
the perspective of most economic thinkers and stock and capital market is one of the most
important sources of providing capital. The total of these factors leads to increased
competition in the market, and increasing competition will also ultimately leads to the
development of the society (MAHMOUD, et al. 2006).
Financial information is one of the most important factors in most decision makings. More complex
decision-making environment with higher uncertainty will add the difficulties of the decision-
making process. In this regard, the financial statements are designed to help users identify the key
relationships and predictions and investors use such information to evaluate the investment
decisions and prioritize them (SASAN; KAVEH; GHOLAMREZA, 2004).

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Tehran Stock Exchange, it appears crucial to provide a method that can facilitate the issue

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