A STUDY ON SFPM ANALYSIS USING FUZZY SOFT SET

Evaluating the financial performance of a company is a turbulent work. There are lots of financial performance measures circling around the field of evaluation. It is very essential to find out a model or tool to select the best financial performance measure which should tolerate the elusiveness in the companies’ decision making problem. Fuzzy Set Theory and Fuzzy Soft Theory have proved to be a successful in handling imprecise and vague knowledge that characterize this kind of problems, and it has been applied in a variety of fields in the last decades. Based on earlier literature, four important parameters, Earnings Per Share (EPS), Price Earning Ratio (P/E Ratio), Economic Value Added (EVA), Market Value Added (MVA), have been selected. The first two measures are from Traditional Accounting Measures (TAM) and the latter two measures are from Value Based Measures (VBM). Selecting a Superior Financial Performance Measure (SFPM) of a company using fuzzy soft set is the target of this paper. AMS Subject Classification: 03E72, 03E75, 62C86


Introduction
Constantly there is a hot debate in the area of corporate financial performance analysis.To evaluate the financial performance of a company, it is very vital to select an appropriate measure.There are several measures available in financial market.However, the researcher has selected the important four measures based on the earlier literature.The selected measures are Earnings Per Share (EPS), Price Earning Ratio (P/E Ratio), Economic Value Added (EVA), Market Value Added (MVA).The first two measures are from Traditional Accounting Measures (TAM) and the latter two measures are from Value Based measures (VBM).After Zadeh [5], many researchers [2,4] using the fuzzy set for decision making.Here, authors intend to select the (SFPM) Superior Financial Performance Measure among the selected measures using the fuzzy soft set.

Research Objective
To identify the superior financial performance measure using the fuzzy soft set.

Sample of the Study
To satisfy the objective, a sample of 50 investors has been selected using convenient sampling method around Madurai region.

Data Collection
Data were collected from the respondents through mailed questionnaire.

Parameters used in the Study
The researcher has identified some key parameters which have been used by the investors rapidly to analyze the financial performance of a company.They are as follows.
• Adjusted Profit

Selected Measures
There is no evidence that single measure is superior to the other.Still it is a hot topic going for debate among the financial analyst.Based on their advancement stated by the Financial analysts four measures have been taken each two from TAM and VBM [1].The selected measures are as given below.

Earnings Per Share (EPS):
Earnings Per Share (EPS) of a business is the portion of its net income of a period that can be attributed to each share of its common stock.

EP S =
N et Income − Dividends on P ref erence Shares N umber of Common Shares Outstanding

Price Earning Ratio (P/E Ratio):
A valuation ratio of a company's current share price compared to its per-share earnings.It is calculated as follows, P/E Ratio = M arket V alue per Share Earnings P er Share(EP S)

Economic Value Added (EVA):
EVA is the Economic profit, which is excess of NOPAT over Capital Charge, the latter being the product of the weighted average cost of capital and the invested capital and it is calculated as where NOPAT is "Net Operating Profit After Tax."

Market Value Added (MVA):
Market Value Added (MVA) shows the difference between the market value of a company and the capital contributed by investors.It is calculated as

Fuzzy Soft Sets and Fuzzy Soft Decision Set
In this section, we present the basic defnitions of fuzzy set and soft set.We also give definition of fuzzy soft set (FS-set) and fuzzy decision set of an FS-set to construct a decision method by which approximate functions of a soft set are combined to produce a single fuzzy set that can be used to evaluate each alternative.
Definition 4.1.Fuzzy subset: [5] A fuzzy subset µ in a non-empty set X is a function µ : X → [0, 1].Definition 4.2.Soft set: Let U refers to an initial universe, E is a set of all parameters, P (U ) is the power set of U , and A ⊆ E. A soft set F A over U is a set defined by a function f A representing a mapping f A : E → P (U ) such that f A = φ if x / ∈ A. Thus a soft set over U can be represented by the set of ordered pairs F A = {(x, f A x) : x ∈ E, f A x ∈ P (U )} Definition 4.3.Fuzzy Soft(FS) set: [3] Let U refers to an initial universe, E is a set of all parameters, P (U ) is the power set of U , and X be a fuzzy set over E.An FS-set on U , is defined by the pair, is the degree of importance of the parameter x, and depends on the decision makers requirements.The sets of all FS-sets over U will be denoted by FPS(U).Definition 4.4.Fuzzy Soft Decision (FSD) set: Let F X ∈ F P S(U ).Then a fuzzy soft decision(FSD) set of F X denoted by F D X and is defined by Step 2: The constraints are ranked according to the ranks given by the 50 respondents.The sums of ranks with respective constraints are given in the following Table.

Constraints
x Step 3: The FSD-set F D X has been attained using the definition 4.

Conclusion
Hence we concluded that EVA is the appropriate measures with the consideration of important constraints in the financial performance analysis using Fuzzy soft decision set.This means EVA act as a Superior Financial Performance Measure in Corporate world.