The Comparative Investigation of Financial Ratio Effects on Decision-making of Bank Managers (Governmental and Private) by the Use of Analytical Hierarchy Process (AHP) Technique
Subject Areas : Business ManagementRasoul Baradaran Hassanzadeh 1 , Farhad Nejhad Irani 2 , Mahrokh Lotfollahi Haggi 3
1 - Assistant Professor, Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran
2 - Assistant Professor of Islamic Azad University, Bonab Branch
3 - Master's degree in financial management
Keywords: decision making, Financial ratios, Banks, Performance Criteria,
Abstract :
The managers and the experts who give credit to the customers are the two groups for whom the financial information relavent to performance is so important. Accordingly, they consider some information like financial ratios to investigate the status of the company on the basis of which they make the appropriate decision. Analyzing the financial ratios has been done since a long time ago. In this study, at first, the importance of the different financial performance criteria was investigated by considering the ideas of the bank experts and by using the technique of AHP. After that, the ratios were put in order of priority and the four main groups were considered in order to get the ideas of the experts and the managers ofthebanks(public and private),therateofincompatibilitywas computed.It is clear that ordering in priority could be used as a suitable guide for the experts and the managers of both private and public banks, according to which they can consider the financial ratios to give credit to their customers and compare it with the ranking technique of horizontal ordering. This study was done to find the difference between the main changes of financial performance, and tried to find a sound relationship between liquidity, efficiency, investment, and profitability among the public and private banks. By using the statistical ways of computing the analysis of variance tow-way within-subjects (ANOVA), it was found that there is no difference between the general financial operations and the decision of the managers of the private and public banks of the two provinces; West Azerbaijan and East Azerbaijan. Then,By using the T-test it was found that there is no difference between the sub financial operations (such as liquidity, profitability, efficiency and investment) that may affect the decision making process of the bank managers of the private and public banks of the two provinces;West Azerbaijan and East Azerbaijan.
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Khosh Tinat, M., & Roohnia, M. (2005). The Effect of Color Charts on the Presentation of Complex Financial Data for a Variety of Financial Decisions. Journal of Accounting Studies, 11, (In Persian).
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Naderi Karaj, M., & Sadeghi, H. (2003). Reviewing the Effectiveness of Useless Banking in Different Countries. Journal of Economic Research, 9 & 10, 42-55, (In Persian).
Ramezani, A. R. (2007). The Effect of Accounting Information on Decision Making by Bank Managers (A Case Study of Managers of Banks in East Azarbaijan Province, Zanjan and Ardebil). Journal of the School of Administrative Sciences and Economics, 1, (In Persian).
Saqeb Tehrani, M., & Tadayyon, Sh. (2005). Information Technology Management. Tehran: Mehrban Publishing, (In Persian).
Simon, Herbert A.(1986). "Rationality in Psychology and Economics", Journal of Business, Oct, Pp. 209-224.
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Abbas Nejad, A. A. (2001). Financial Evaluation of Companies Accepted in Tehran Stock Exchange Based on the Analytical Hierarchy Process. Master's Thesis, Imam Sadegh Tehran: University, (In Persian).
Ali Zad Saneh, N. (1999). Evaluation of the Efficiency of the Banking System Using Methodology of Data Envelopment Analysis of Branches of Bank Saderat Iran. Master's Thesis, Tehran: Alzahra University, (In Persian).
Al-Saati, T. (1999). Decision Making for Managers. Translated by: A. Asghar Tofiq, Tehran: Industrial Management Organization Press, (In Persian).
Amini Foskhodi, A. (2006). Evaluation of Decision Making Units Using Group Fuzzy Prioritization Planning Model. Research journal of Isfahan University (Humanities), 20, 211-230, (In Persian).
Athanassopoulos, A. D. (1997). “Service Quality and Operating Efficiency Synergies for Management Control in the Provision of Financial. Services: Evidence from Greek Bank Branches”, European Journal of Operational research, 98,pp 301-314
Athanassopoulos. A. D. and Ballantine, J. A. (1995). “Ratio and Frontier Analysis for Assessing Corporate performance: Evidence from Grocery industry in the UK”, Journal of the operational Research Society, 46,pp 427-440
Berg, A. (1991). “Technical Efficiency in Norwegian Banks: a Non Parametric Approach to Efficiency measurement”, Journal of Production Analysis,2,pp127-142
Berger, A. N., Humphrey, D. B., (1992). measurement and Efficiency Issus in commercial Banking. Second Edition, Chicago:University of Chicago Press.
Chandra, p. (2001). Financial management accounting.Fourth Edition,New York:McGraw Hill.
Fucuyama, H. (1993). Technical and Scale Efficiency of Japanese Commerical Banks: A Non Parametric Approach.Appl.Econ.25,pp 1101-1112.
Ghodsipour, H. (2000). AHP Hierarchy Process Analysis Process. Tehran, Amir Kabir University Publication, (In Persian).
Halkos, George E. and Dimitrios S. Salamouris. (2004). Efficiency Measurement of the Greek Commercial Bank with the Use of Financial Ratios: a DEA Approach. Management Accounting Research. 15(2).pp201-224
Helfert, E. A. (2001). Financial Statement Analysis: Tool and Technigues:A Guid for managers. Tenth Edition, New York: McGraw Hill.
Islam Bidgoli, Gh., & Kashanipour, M. (2004). Comparison and Evaluation of Methods for Measuring the Efficiency of Bank Branches and Providing a Suitable Model. Journal of Accounting and Auditing Reviews, 38, 3-27, (In Persian).
Khodadad Hosseini, S. H., Fathi, S., & Elahi, Sh. (2006). Designing the Influence of Information Technology Influence on Financial Performance Measures by Meta-analysis. Journal of Accounting and Auditing Reviews, 38, 46-61, (In Persian).
Khosh Tinat, M., & Roohnia, M. (2005). The Effect of Color Charts on the Presentation of Complex Financial Data for a Variety of Financial Decisions. Journal of Accounting Studies, 11, (In Persian).
Lev, B. (1974). Financial Statement Analysis:A New Approach. Englewood Cliffs, New Jersey: Prentice Hall, Inc.
Naderi Karaj, M., & Sadeghi, H. (2003). Reviewing the Effectiveness of Useless Banking in Different Countries. Journal of Economic Research, 9 & 10, 42-55, (In Persian).
Ramezani, A. R. (2007). The Effect of Accounting Information on Decision Making by Bank Managers (A Case Study of Managers of Banks in East Azarbaijan Province, Zanjan and Ardebil). Journal of the School of Administrative Sciences and Economics, 1, (In Persian).
Saqeb Tehrani, M., & Tadayyon, Sh. (2005). Information Technology Management. Tehran: Mehrban Publishing, (In Persian).
Simon, Herbert A.(1986). "Rationality in Psychology and Economics", Journal of Business, Oct, Pp. 209-224.
Worthington, Andrew. C. (1998). “The Application of Mathematical Programming Techniques to Financial Statement Analysis: Australian Gold Production and Exploration”, Australian Journal of Management, 23(1),pp 97-113.
