Comparing Aras and Copras Methods to Evaluate Firms By Using Fundamental Analysis

Abstract

Decision making process is a though process not only for the management decisions but also for daily decisions. Multicriteria decision making methods were developed to make this process easier. There are many multicriteria decision making methods used in many areas at the present. In this study two of these methods were used, namely ARAS (Additive Ratio Assessment) and COPRAS (Complex Proportional Assessment), for fundamental analysis in investment decisions. Aim of this study is to implement and compare methods on fundamental analysis of firms to make an investment decision. In the study financial ratios of 20 firms from 5 different sectors and 4 different countries, sectoral data and country indicators were used. According to these data, ARAS and COPRAS methods were implemented and although exactly same results were not found, approximately similar results were obtained. The best and the worst companies were same for both methods, even though other rankings differed slightly. Also, same sector selected as best for both methods to invest in.