Automated Rating of Financial and Economic Condition of Companies

Abstract

The ratings-based approach to assessment of financial and economic condition of companies was analyzed from the perspective of multiple-criteria selection. The author specifies basic problems to be solved when making integral ratings: selection of the compromise principle and relevant optimality principle; accounting for priorities of the criteria; criteria normalization. The article analyzes one of the most widespread compromise principles of ratings—the principle of fair compromise, which solves the problem of multiple criteria in a radical way through convolution of relevant set of criteria into a single integral criterion. The procedure, which is based on the hierarchical analysis method and some auxiliary computing procedures, which allow to make point and interval assessments of indicators of companies’ financial and economic condition, is suggested for hierarchical synthesis of the integral rating. The author considers the procedure application chart, which was brought up to the level of implementation. Automated application was made on the MS Excel tabular processor platform using VBA, and such automated application includes three basic functional subsystems: source data import subsystem; subsystem for assessment of the companies’ financial and economic condition; the companies’ ratings generation subsystem. The suggested solution may be used as a prototype of a commercial automated system, which allows the customer to specify requirements in respect of the created system, and which allows the developer to adjust its functionality, with direct involvement of system users for this purpose. The developed prototype was tested on the data of six real single-industry companies.

DOI: 10.5901/mjss.2015.v6n5s4p297