INVESTMENT MODEL TO RANK COMPANIES

Abstract

Purpose With the exponential development of commercial operations in today's world, the presence of a performance evaluation mechanism in all organisations is a foregone conclusion. This requirement is so obvious that the absence of an evaluation mechanism is seen as a sign of the organization being unhealthy. Financial reviews motivate businesses to improve their results by displaying a company's actual financial status in comparison to other businesses by providing a favourable atmosphere. These types of evaluations are also helpful in reforming and strengthening shortcomings by recognising the strengths of completed operations. In today's intensely competitive climate, financial results evaluation is a critical process for businesses. Company rating is a complicated mechanism that requires the consideration of several financial ratios at the same time. Furthermore, the task of selecting a suitable loan applicant firm has become more difficult, as financial professionals must evaluate a broad variety of options based on a collection of competing financial requirements . As a result, all insiders and customers of a company benefit from establishing a specific and appropriate performance evaluation procedure. To assess financial results, we must consider a number of financial metrics that represent a company's competitiveness. To properly measure and rate the relative success of rival firms, multiple financial ratios must be considered simultaneously. To accomplish this goal, a systematic literature analysis and expert advice are used to identify the key requirements. Method The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method was selected to solve the problem after a rigorous literature analysis. The TOPSIS method will determine the financial ratios' importance to the evaluation result and show how firms work differently on each financial ratio. This paper examines the TOPSIS approach and offers an online website platform that anybody can use to rate US companies in various industries. The created website takes data from a financial api and automatically executes calculations using the TOPSIS model. It gives us the names of all the companies, their tickers, and the rankings they have earned. Anyone in the world may use the website, which is used to rate firms in a specific industry in the US market Findings The result of this research is a tool in the form of a website that can be used by various investors, analysts, traders and researchers to ascertain the ranking of companies in an industry according to the fundamental ratios. The ranking is based on only the ratios and it doesn’t take into account other stock market factors such as sentiments, macroeconomics and political forces etc. Ignoring all these factors the model is a robust tool to rank companies and can be used in conjunction with other research that accounts for these other factors to provide fruitful results.