An empirical investigation on ranking financial risk factors using AHP method

Abstract

Article history: Received December 28, 2013 Accepted 10 April 2014 Available online April 14 2014 This paper determines and ranks financial risk factors in Iranian corporations, using analytical hierarchy process (AHP). The present research includes one main question and four subquestions. Its universe population includes managers, production and financial personnel of great corporations activating in Tehran Stock Exchange, who were selected to explain importance and weight of economic risks indices. The source of great corporations recognition is the Companies Registration Organization in Tehran Province, and according to this, there are 120 corporations. The results have indicated that financing risk maintains the highest priority followed by credit risk, liquidity risk, inflation risk and exchange risk. In terms of different risks associated with financing risk, risk of profit per share has been the number one priority followed by the risk of divisional profit per share, the risk of recessionary or boom and the risk of increasing partial pay profit rate. In terms of credit risk, the risk of loan has been number one priority followed by the risk of inability of loan payment and interest payment. Liquidity risk is another risk factor where demand has been the most important factor followed by rules and regulations and inflation risk. In terms of inflation, producers price risk has been the most important factor followed by consumer price risk, gross domestic product and producers price risk. Finally, in terms of different factors influencing exchange risk, export related issues are considered as the most important factors. © 2014 Growing Science Ltd. All rights reserved.