Abstract
For over a hundred years, manufacturing firms has been a major sector of the US economy. In today’s competitive market, being able to accurately evaluate the firm’s financial performance is becoming increasingly important. By appropriately evaluating the financial performance of the company, a firm can better protect their market position and protect their market shares while the financial statement users can better understand the firm’s financial position and have better valuation on the company. In this paper, the author utilizes the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method to analyze financial ratios of twenty selected manufacturing firms in the US market. This method enables us to rank these firms according to their financial performance. Although some similar analytics has been done on multiple industries, this article focuses specifically on manufacturing companies and seeks to reach a better understanding of whether this ranking system can explain the overlap between the financial performance and the market value of manufacturing companies.
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