Title: Evaluating financial performance of Indian IT firms: an application of a multi-criteria decision-making technique

Authors: Sarveshwar Kumar Inani; Rohit Gupta

Addresses: Finance and Accounting Area, FPM-5, FPM Hostel, Indian Institute of Management (IIM), Lucknow 226013, Uttar Pradesh, India ' Operations Management Area, FPM-20, Indian Institute of Management (IIM) Lucknow, Prabandh Nagar, Lucknow 226013, Uttar Pradesh, India

Abstract: This study evaluates the financial performance of nine information technology (IT) firms, listed in National Stock Exchange of India, for a period of 5 years from 2011 to 2015. A multi-criteria decision-making technique (MCDM) - Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) - is used to rank the firms according to their financial performance, by considering 10 frequently used financial ratios as multiple criteria. The results indicate that TCS firm has been the top performer for the 4 years out of a total 5-year period of the analysis, whereas the firm Wipro is found to have the lowest rank during the same period. The lower ranking firms can revise their strategies by analysing the policies of better-performing firms. These results provide useful insights to identify the consistent and stable players in terms of financial performance. These findings could be useful for the managers at different levels, various stakeholders in the firms, investors and investment analysts.

Keywords: financial performance; financial ratios; Indian IT sector; multi-criteria decision-making techniques; TOPSIS.

DOI: 10.1504/IJBAF.2017.086425

International Journal of Behavioural Accounting and Finance, 2017 Vol.6 No.2, pp.126 - 139

Received: 07 Sep 2016
Accepted: 17 Mar 2017

Published online: 10 Sep 2017 *

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