Distinguishing Successful and Unsuccessful Firms In Tehran Stock Exchange: Using Compound Approach

This study tends to present a decision making model for evaluating the companies’ financial performance and providing the optimum way for Ranking them in Tehran stock market using financial ratios. The considered approach is based on “Fuzzy Analytical Hierarchy Process” and “Technique for Order Preference by Similarity to Ideal Solution”. Fuzzy Analytical Hierarchy Process is used in determining the weights of the criteria (financial ratios) and then the final ranking is performed using these weights and Technique for order preference by similarity to ideal solution. This compound method is applied in ranking and evaluating the financial performance of 30 firms in cement industry in Tehran stock exchange based on their financial tables during the years 2002 to 2008. The compound method and the result obtained from it, was compared with the results gained from each separate technique (mentioned above) and the superiority of compound method is proved. The results will be helpful for investors and also the firms who want to gain more insight about their stand point in industry.