Financial performance evaluation based on integrated MCDM MEREC–ARAS framework

Marija Mladenović; Tijana Đukić; Darjan Karabašević; Gabrijela Popović; Pavle Brzaković

doi:10.71159/bizinfo260022M

Authors

Marija Mladenović University Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade, Serbia
Tijana Đukić University Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade, Serbia
Darjan Karabašević University Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade, Serbia; Korea University, College of Global Business, Sejong, Republic of Korea
Gabrijela Popović University Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade, Serbia
Pavle Brzaković University Business Academy in Novi Sad, Faculty of Applied Management, Economics and Finance, Belgrade, Serbia

DOI:

https://doi.org/10.71159/bizinfo260022M

Keywords:

financial analysis, multi-criteria decision-making, optimization, MEREC, ARAS

Abstract

Decision-making based on financial analysis in the modern business environment is a very complex process due to the need to consider often conflicting criteria. By applying multi-criteria decision-making methods to optimize the financial analysis process, a more comprehensive and objective insight into the financial condition and performance of business entities is obtained. By combining traditional financial indicators with modern multi-criteria techniques, such as MEREC and ARAS, we can rank companies based on selected financial criteria, with optimal determination of the weights of the criteria. Empirical analysis confirms that the proposed approach contributes to better and more reliable selection of entities, improves the decision-making process and reduces the subjectivity of analysts. The research results can be of great importance for financial managers, investors and other stakeholders who strive for more efficient and transparent financial decision-making.

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