A Three-Phase Algorithm for Selecting Optimal Investment Options Based on Financial Ratios of Stock Companies
Journal Title: Journal of Operational and Strategic Analytics - Year 2024, Vol 2, Issue 4
Abstract
The identification of optimal stock or portfolio options is a critical concern for investors aiming to maximize profitability within financial markets. With the increasing complexity of available alternatives and the growing volume of financial data, selecting the most suitable investment has become more challenging. Decision-makers often face difficulties in navigating these vast data sets and require robust support tools to simplify and enhance the decision-making process. This study proposes a three-phase approach designed to reduce data complexity and facilitate more detailed analysis. In the initial phase, firms demonstrating low operational efficiency, as indicated by their inventory turnover ratio, were excluded from further consideration. In the subsequent phase, data envelopment analysis (DEA) was employed to assess the efficiency of remaining firms, with those exhibiting efficiency scores lower than one being removed from further investigation. Finally, the third phase involved determining the relative importance of each financial ratio through the calculation of their respective weights, allowing for the ranking of firms based on these adjusted values. The results of this approach provide decision-makers with a refined list of viable investment options, contributing to more informed stock portfolio optimization decisions.
Authors and Affiliations
Zahra Joorbonyan, Sapan Kumar Das, Seyed Ali Noorkhah, Ali Sorourkhah
Keywords
Related Articles
- EP ID EP753406
- DOI https://doi.org/10.56578/josa020401
- Views 20
- Downloads 1
A Comprehensive Model for Calculating the LPI Index of Key Transport Corridors in Serbia
The Logistics Performance Index (LPI) represents a tool developed by the World Bank that is used to measure the efficiency and effectiveness of a country’s logistics sector, and comprises of six components. This indicato...
Optimizing Hard Disk Selection via a Fuzzy Parameterized Single-Valued Neutrosophic Soft Set Approach
This study introduces a novel approach to decision-making problems, especially in the context of hard disk selection, using the concept of the fuzzy parameterized single-valued neutrosophic soft set (FP-SVNSS). Primarily...
Complex Fermatean Fuzzy Models and Their Algebraic Aggregation Operators in Decision-Making: A Case Study on COVID-19 Vaccine Selection
The COVID-19 pandemic has prompted extensive modeling efforts worldwide, aimed at understanding its progression and the myriad factors influencing its spread across diverse communities. The necessity for tailored control...
Addressing Cost-Efficiency Problems Based on Linear Ordering of Piecewise Quadratic Fuzzy Quotients
Ordering of quotients is a critical aspect of cost-efficiency problems, which hold significant interest and importance for suppliers of goods and services as well as consumers. Comparisons (ordering) are straightforward...
Strategic Adaptation in Travel Agencies: Integrating MARA with SWOT for Uncertainty Navigation
In the realm of managerial decision-making, particularly within the last few decades, the process has emerged as a formidable challenge. This paper focuses on strategic decision-making, crucial in determining organizatio...