Performance evaluation of top 50 companies of Tehran Stock Exchange based on identified indices in 2012

Bahareh S. Mirdamadian, Hadi Shirouyehzad and Mostafa Rajabi

International Journal of Productivity and Quality Management, 2016, vol. 18, issue 1, 19-33

Abstract: One of the main challenging issues for investors in stock market is comparing companies' financial performance and finding more profitable ones. This comparison should be based on effective indices. In this paper, important indices are identified using previous studies and expert's opinion. Then top 50 companies of Tehran Stock Exchange, announced in the third quarter of 2012, are evaluated using data envelopment analysis. DEA is applied to assess efficiency of DMUs regarding the financial identified indices including price per earning, total assets, systematic risk, non-systematic risk, return on equity as inputs and yearly efficiency, sales growth, current ratio and earning per share as outputs. The result indicates that 20 companies are efficient among top 50 companies. To set priorities for investors, companies were ranked by Makui method. Sensitivity analysis results shows that EPS and ROE have the most influence on efficiency of DMUs.

Keywords: data envelopment analysis; DEA; Tehran Stock Exchange; financial indices; Makui method; performance evaluation; top 50 companies; Iran; firm performance; stock markets; financial performance; price per earning; total assets; systematic risk; non-systematic risk; return on equity; yearly efficiency; sales growth; current ratio; earning per share. (search for similar items in EconPapers)
Date: 2016
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