Finding critical financial ratios for Taiwan's property development firms in recession

Finding critical financial ratios for Taiwan's property development firms in recession Ratio analysis is an excellent way of looking into a firm's financial status. However, in performing the ratio analysis, an often underemphasized task is the selection of ratios for use. In a multi-criteria decision-making framework, poor quality of criteria selection, i.e. financial ratios, will consequently undermine the quality of evaluation. Aims at establishing a systematic approach for finding critical financial ratios to assist in financial analysis for the construction industry. As each sector of the industry is intrinsically unique, the set of critical ratios for different sectors will certainly vary. However, the approach for finding useful financial ratios will not distinguish itself with respect to the concerned sector rather than the purpose of analysis. The proposed approach incorporates the concept of multi-criteria decision making and the entropy method. The approach is demonstrated in a case study in which major property development firms in Taiwan are evaluated. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Logistics Information Management Emerald Publishing

Finding critical financial ratios for Taiwan's property development firms in recession

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Publisher
Emerald Publishing
Copyright
Copyright © 2001 MCB UP Ltd. All rights reserved.
ISSN
0957-6053
DOI
10.1108/EUM0000000006252
Publisher site
See Article on Publisher Site

Abstract

Ratio analysis is an excellent way of looking into a firm's financial status. However, in performing the ratio analysis, an often underemphasized task is the selection of ratios for use. In a multi-criteria decision-making framework, poor quality of criteria selection, i.e. financial ratios, will consequently undermine the quality of evaluation. Aims at establishing a systematic approach for finding critical financial ratios to assist in financial analysis for the construction industry. As each sector of the industry is intrinsically unique, the set of critical ratios for different sectors will certainly vary. However, the approach for finding useful financial ratios will not distinguish itself with respect to the concerned sector rather than the purpose of analysis. The proposed approach incorporates the concept of multi-criteria decision making and the entropy method. The approach is demonstrated in a case study in which major property development firms in Taiwan are evaluated.

Journal

Logistics Information ManagementEmerald Publishing

Published: Dec 1, 2001

Keywords: Finance; Performance measurement; Entropy; Methodology

References

  • Financial ratios, discriminate analysis and the prediction of corporate bankruptcy
    Altman, E.I.
  • Multiple Attribute Decision Making
    Hwang, C.L.; Yoon, K.

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