ANALYSIS OF FINANCIAL PERFORMANCE USING VIKOR MCDM METHOD – A STUDY ON SELECTED INDIAN CEMENT COMPANIES

Abstract

Multi-Criteria-Decision -Making (MCDM) is one of the most significant tools to determine the relative position of a company in respect of its financial performance. Though the ratio analysis gives some insight into the financial health of a company but considering too many ratios at times it becomes very complex to determine the actual position of a company in respect of its overall performance or other financial measurement aspect. In this paper it has been attempted to analyze the financial performance of 10 selected cement companies in India for the period of 2014 to 2023 in respect of their liquidity, profitability, efficiency and overall performance by using one of MCDM method VIKOR. Total 15 ratios, 5 each for liquidity, profitability, efficiency criteria have been considered to measure the financial performance. Entropy weight has been used for analysis of financial performance under the VIKOR method. Spearman’s rank correlation coefficient has been used to determine the correlation between liquidity, profitability, efficiency and overall performance and found there is strong correlation between the rank of liquidity, profitability and overall performance.