Abstract

VALENCIA-CARDENAS, Marisol  and  RESTREPO-MORALES, Jorge Anibal. Evaluation of financial management using latent variables in stochastic frontier analysis. Dyna rev.fac.nac.minas [online]. 2016, vol.83, n.199, pp.35-40. ISSN 0012-7353.  https://doi.org/10.15446/dyna.v83n199.54612.

It is impossible to ascertain the quality of business Management through traditional financial indicators; these alone do not accurately infer about business states in such important aspects as the efficiency of business management. The concept of quality management is very abstract and such quantification underlies latent aspects of areas with no measure, within a structural financial classification. The process proposed in this paper, permits to identify, characterize and determine associations between areas related to the indicators of the CAMEL model (C, Capital Adequacy, A, Assets Quality, M, Management, E, Earnings, L, Liquidity) as latent variables, estimated from a Multivariate Data Analysis technique, the CFA. Using this result, it is estimated a Stochastic Frontier Analysis (SFA), and a model of Data Envelopment Analysis (DEA), whose comparison, analysis and contrast, permits the evaluation of the quality of the management of a Colombian financial sector.

Keywords : Financial Analysis; Latent Variables; Factor Analysis; Stochastic Frontier Analysis.

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