Synopses & Reviews
Whether used as predictors or indicators of stock prices, financial risk, merger candidates, or bond yields, financial ratios have been, and continue to be, a popular tool for analyzing a firm and its performance. Practitioners and academics who employ financial ratios often compare and contrast across several industries, but such evaluations assume that the ratios of one industry measure the same underlying concepts as the ratios of another. This book provides evidence on the comparability of financial ratios across several industries, assessing the similarity or dissimilarity of ratios among industry taxonomies, or groups of ratios.
Extending previous studies that focused primarily on manufacturing firms, this work surveys a wide variety of both manufacturing and retail corporations, and determines the classification patterns of their respective financial ratios. The taxonomies of thirty two ratios, in seven representative industries, are examined for the ten-year period from 1978 through 1987. Two introductory chapters detail the nature of the research, the data utilized, variables employed, and statistical methodologies, as well as providing a brief summary of the results. A third chapter furnishes results for the entire economy by factors of return, cash flow, cash position, inventory, sales, liquidity, and debt; while seven separate chapters describe the study's conclusions for each of the primary industries: automobile and aerospace; chemical, rubber, and oil; electronics; food; retail; steel; and textile. The work concludes with a summary of the study and its conclusions, and an examination of the limitations of this type of research and possibilities for its extension. This book will be a valuable practical resource for accounting and finance professionals, as well as an important reference for courses in finance, accounting, and management. Public, academic, and business libraries will also find it a useful addition to their collections.
Review
This volume is a specialized treatise on the comparability of financial ratios across the industry classifications. The treatise is thoroughly written and demonstrates how a financial analyst may use factor-analytic techniques 'to view the fundamental relationships underlying the date from different perspective and to use his or her intimate knowledge of the industry and the economy to make sense of financial numbers.' In short, the book is for the skilled practitioner of security analysis. Most appropriate for use in advanced-level courses in investments, courses that are more commonly taught in business schools than in liberal arts colleges. University and professional collections.Choice
Synopsis
The authors have assessed seven financial ratios in relation to seven mai
Synopsis
The authors have assessed seven financial ratios in relation to seven main manufacturing and retail industries. The result is a new factor analysis that will allow financial analysts to compare the performances of different types of companies and establish a global view of their relative positions.
Synopsis
n manufacturing and retail industries. The result is a new factor analysis that will allow financial analysts to compare the performances of different types of companies and establish a global view of their relative positions.
Synopsis
This work takes financial ratios, a popular tool for analyzing firms and their performance, and describes the methods that can be used for comparing these ratios across a large number of industries. The authors have assessed seven financial ratios--return on investment, capital intensiveness, inventory intensiveness, financial leverage, receivable intensiveness, short term liquidity, and cash position--in relation to seven main manufacturing and retail industries. The result is a new factor analysis that will allow financial analysts to compare the performances of different types of companies and establish a global view of their relative positions.
Table of Contents
Purpose and Overview
Data, Variables, and Methodology
Classification of the Ratios for the Economy
Classification and Analysis of Ratios for the Automobile and Aerospace Industry
Classification and Analysis of Ratios for the Chemical, Oil, and Rubber Industry
Classification and Analysis of Ratios for the Electronics Industry
Classification and Analysis of Ratios for the Food Industry
Classification and Analysis of Ratios for the Retail Industry
Classification and Analysis of Ratios for the Steel Industry
Classification and Analysis of Ratios for the Textile Industry
Summary and Conclusions
Bibliography
Index