Financial Performance Analysis of Select Pharmaceutical Companies in India: An Application of TOPSIS Mettiod

Abstract

The aim of this study is to analyse the financial performance of select twenty eight NSE listed pharmaceutical companies during the period 2001-2012 with the help of TOPSIS method. Accordingly, Shannon's entropy method has been used to determine the weights of select seven accounting ratios. In our entire study, highest performance has been observed for Glaxosmit and Ajanta Pharma has obtained the lowest position as per the ranking of the composite index. It is further observed that, for the other sample companies during the study period, high statistically significant association has been observed between composite index based ranking and liquidity as well as efficiency, though low significant association has been observed between profitability based ranking and composite index.