 A multicriteria approach for evaluating the performance of industrial firmsD Diakoulaki, George Mavrotas and L Papayannakis Omega, 1992, vol. 20, issue 4, 467-474 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. Keywords: interfirm; comparisons; financial; ratios; ratio; analysis; multicriteria; analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jomega:v:20:y:1992:i:4:p:467-474 Ordering information: This journal article can be ordered from Access Statistics for this article Omega is currently edited by B. Lev More articles in Omega from Elsevier |
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