The proportionality of financial ratios: implications for ratio classifications

Abstract

Studies investigating financial ratio proportionality are incorporated with studies related to the empirical classification patterns of financial ratios. The proportionality assumption of ratios seems to hold rather well in a sample of listed Finnish firms. Furthermore, the results of the empirical classification patterns based on the alternative functional specifications of financial statement items are very similar to each other. The results suggest that the ratio approach is a highly useful tool in financial statement analysis, especially when a set of ratios is used to evaluate a firm's performance.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 14 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.