Financial performance evaluation of present petrochemical companies in stock exchange by data envelopment analysis

Fereshteh Mashhadi, Azam Hosseini Ballam and Hadi Shirouyehzad

International Journal of Productivity and Quality Management, 2015, vol. 16, issue 1, 17-35

Abstract: Evaluating companies' performance and comparing them have enjoyed stakeholders' attention. Also, since analysing financial ratios is not capable of finding the most desirable performance and determining inefficient units, it is possible to employ data envelopment analysis (DEA) for using several financial criteria in order to determine evaluation rate of financial performance. The present study tries to shed light upon DEA through a financial approach to judge the performance of present petrochemical companies in stock exchange that submitted their financial records to stock exchange organisations between 2006-2011. After calculating financial ratios and entering data in an input-based BCC model, in DEA Frontier 2007 software, the efficiency of each company in end of each year will be measured and next, geometric mean of efficiency for related year will be gauged. Finally, results reveal that Farabi Petrochemical Company is financially the most efficient and Jam Petrochemical Company is financially the most inefficient.

Keywords: performance evaluation; financial records; data envelopment analysis; DEA; firm efficiency; petrochemical industry; financial performance; stock exchange; stock markets; Iran. (search for similar items in EconPapers)
Date: 2015
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