Abstract: This study proposes a new efficiency measurement technique CDS as combination of data
envelopment analysis (DEA) and stochastic frontier analysis (SFA) and compares the CDS efficiency score
with the DEA and SFA efficiency scores. The financial companies listed in Malaysian Stock Exchange for the
period 2007-2016 are used to estimate the different types of efficiency score. Besides, linear regression
analysis and ULFR (unreplicated linear functional relationship) analysis are used to analyze the performance
of this CDS technique with the DEA and SFA techniques. The result suggests that the most efficient model is
CDS which has a significant positive correlation with profit risk. Among the CDS, DEA and SFA techniques,
the recommended technique (CDS) shows higher coefficient of determination values for both ULFR (0.9994)
and linear regression (0.292) analysis. Also, based on the results of CDS, this study postulates that the most
efficient firm is ACSM (Aeon Credit Service (M) Bhd) and the least efficient firm is MAY (Malayan Banking
Bhd).
