Confirmatory Factor Analysis: Model Testing of Financial Ratio's with Decision Support Systems (DSS) Approach

T. Husain, Maulana Ardhiansyah, Dedin Fathudin


The decision support systems approach can be developed into both computer-based and quantitative analysis tools. This research uses a model test with a confirmatory factor analysis (CFA) technique on matrix covariance against SEM methods to measure financial ratios. DSS analysis using numerical calculations aided by mathematical models through six phases. The first three phases of a structured approach to building multivariate models and the next three phases, namely estimation, interpretation, and validation, are developing from data input that has been selected using LISREL Version 8.72. The Financial Ratio's testing model with a CFA approach derived into a mathematical (quantitative) model can explain the complexity of the relationship between the goodness-of-fit model (GOF) with a different approach from prior research. The goodness-of-fit test results in this study produced scores on each of the financial ratio measurement models at an accuracy level of CR of 78.49, TATO of 1.26, DER of 41.41, ROA of minus 0.033, and PBV of 540.92. This means that PBV has the highest standardized loading factors to determine the measurement of Financial Ratio's. The CFA measurement based on SEM can be used to make appropriate decisions and combine a model comparison and redevelopment of the CFA technique and model testing with other software such as SPSS, PLS, AMOS, and others.


Ramesh Sharda, Dursun Delen, and Efraim Turban, Business Intelligence and Analytics: Systems for Decision Support, 10th ed. NJ: Pearson, 2015.

Efraim Turban, Jay E. Aronson, Ting-Peng Liang, and Richard V. McCarthy, Decision Support Systems and Intelligent Systems, 7th ed.: Prentice-Hal! of India Privated Limited, 2007.

Galit Shmueli, Nitin R. Patel, and Peter C. Bruce, Data Mining for Business Intelligence: Concepts, Techniques, and Applications in Microsoft Office Excel with XLMiner, 2nd ed. Canada: John Wiley & Sons, Inc, 2010.

Joseph F. Hair, William C. Black, Barry J. Babin, and Rolph E. Anderson, Multivariate Data Analysis, 7th ed. London: Pearson Education Limited, 2014.

Agus Djoko Santosa, LISREL 8.7 dalam Pengolahan Data Penelitian (Cetakan ketiga). Yogyakarta: Penerbit Kepel Press, 2020.

Kjersti Aas, Claudia Czado, Arnoldo Frigessi, and Henrik Bakken, "Pair-copula constructions of multiple dependence," Insurance: Mathematics and Economics, vol. 44, no. 2, pp. 182-198, April 2009.

Sayyed H. Kadhem and Aristidis K. Nikoloulopoulos, "Factor copula models for mixed data," Workshop at the Technical University of Munich, p. 24, July 2019.

Kjersti Aas, "Pair-Copula Constructions for Financial Applications: A Review," Econometrics, vol. 4, no. 4, pp. 43 (1-15), 2016.

Ulf Schepsmeier, "A goodness-of-fit test for regular vine copula models," Econometric Reviews, vol. 38, no. 1, pp. 25-46, 2019.

Jörg Henseler and Marko Sarstedt, "Goodness-of-fit indices for partial least squares path modeling," Compu Stat, vol. 28, pp. 565–580, 2013.

Alberto Maydeu-Olivares, "Maximum Likelihood Estimation of Structural Equation Models for Continuous Data: Standard Errors and Goodness of Fit," Structural Equation Modeling: A Multidisciplinary Journal, vol. 24, pp. 383–394, February 2017.

A. Rizkiana and P. Hendikawati, "Classification of Customer Satisfaction Levels with Discriminant Analysis," MIPA of Journals, vol. 38, no. 1, pp. 89-100, November 2015.

Steffen Grønneberg and Njål Foldnes, "Covariance Model Simulation Using Regular Vines," Psychometrika, vol. 82, no. 4, pp. 1035-1051, January 2017.

Stefano Palminteri, Valentin Wyart, and Etienne Koechlin, "The Importance of Falsification in Computational Cognitive Modeling," Trends in Cognitive Sciences, vol. 21, no. 6, pp. 425-433, June 2017.

L.A. Botes, W. Booysen, M.J. Mathews, and M. Kleingeld, "A systematic decision support system to objectively evaluate retrospective energy efficiency modeling options," Journal of Energy in Southern Africa, vol. 30, no. 2, pp. 52-63, May 2019.

Amged Saleh Shkeer and Zainudin Awang, "Exploring the Items for Measuring the Marketing Information System Construct: An Exploratory Factor Analysis," International Review of Management and Marketing, vol. 9, no. 6, pp. 87-97, 2019.

T. Husain and Maulana Ardhiansyah, "Pair-Samples T Test: Simulation Model of Financial Ratio's Measurement with Decision Support Systems (DSS) Approach," International Journal of Advanced Trends in Engineering, Science and Technology (IJATEST), vol. 5, no. 4, pp. 13-17, July 2020.

Indonesia Stock Exchange. (2019, December) IDX. [Online].

Supranto and Nandan Limakrisna, Petunjuk Praktis Penelitian Ilmiah untuk Menyusun Skripsi, Tesis dan Disertasi, 5th ed. Bogor: Penerbit Mitra Wacana Media, 2019.

Sheridan Titman, Arthur J. Keown, and John D. Martin, Financial Management: Principles and Applications, 12th ed. Boston, USA: Prentice Hall, 2013.

T. Husain, "An Analysis of Modeling Audit Quality Measurement Based on Decision Support Systems (DSS)," European Journal of Scientific Exploration, vol. 2, no. 6, pp. 1-9, December 2019.

Total views : 103 times


  • There are currently no refbacks.

Copyright (c) 2021 Institute of Advanced Engineering and Science

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

International Journal of Advances in Applied Sciences (IJAAS)
p-ISSN 2252-8814, e-ISSN 2722-2594

Web Analytics View IJAAS Stats