A novel application of grey principal component analysis to determine stockholder's approach towards financial ratios

Amin Babaei Falah, Morteza Sardari
2015 Business and Economic Horizons  
In this paper we try to determine the stockholder's desire approach to financial ratios using a combination of principal component analysis and grey theory. Grey principal component analysis (GPCA) handles poor information reduces dimensions of variables and gives an appropriate score to each company. Here we employ GPCA to identify more appropriate strategies of normalizing data curves to reduce the discrepancy between the GPCA-ranking and return-ranking, hence determining the approaches of
more » ... ckholders of listed pharmaceutical firms of Tehran Stock Exchange (TSE) regarding financial ratios. JEL Classifications: C21, G10, L65
doi:10.15208/beh.2015.04 fatcat:j7jtrjmo5baadmx4pi3atlqpzi