Ranking of companies considering TOPSIS-DEA approach methods (Evidence from Cement industry in Tehran stock exchange)

Abstract

Ranking techniques has always been the main concerns of managers. There are a lot of qualitative and quantitative approaches for ranking. However most of the approaches to ranking corporations in stock market suffer from low validity thus the obtained results will be invalid. When the evaluation carried out merely through qualitative or quantitative approaches alone, the advantages of integration will be ignored. Thus logically the efficiency of result will be questionable. Therefore in this paper the advantages of qualitative and quantitative approaches are integrated to bring about more precision in values of input and output indices. Hence in this paper integrated approach, Technique for Order Preference by Similarity to the Ideal Solution (TOPSIS) and Data Envelopment Analysis (DEA), have been introduced to rate active companies in cement industry accepted in Tehran Stock Market. The approach adopted in this paper is applicable at any condition to stock ranking. The research carried out during 2006-2012 and the population of the research includes accepted companies in stock market in cement industry (28 companies). Finally a precise ranking of the companies is presented by hybridized technique. When the result presented to stock market experts, the majority of participants admired integrated approach to companies ranking.