Application of Heterogeneous Multi-Criteria Decision Making in the Financial Analysis for Manufacturing Company

Abstract

Financial conditions can reflect the economic development of manufacturing companies in the past, present and future. The analysis of corporate financial conditions can help to provide information and evidence for decision-making. Therefore, the financial analysis method which is helpful to make decision has been widely concerned by scholars. However, the indexes that reflect the financial condition of the company not only may be clear numbers, but also may be non-numerical information which cannot be represented by the exact value. In order to solve the problem that most existing methods didn't take the fuzzy value and the actual value into consideration, the heterogeneous multi criteria decision (MCDM) is applied to analyze the financial condition of the manufacturing enterprises in this paper. The proposed method employs fuzzy theory to improve extant financial index system and considers quantitative and qualitative attributes, which may leads heterogeneous information, such as real numbers, interval numbers and triangular fuzzy numbers. Furthermore the proposed method determines companies ordering by using TOPSIS based on their total financial condition. Moreover, based on the comparison between these companies, different aspects of the financial conditions can be analyzed in detail. Finally, a case study is conducted to verify the proposed method can effectively analyze the financial conditions of manufacturing companies.