A strong relationship between the firm's financial ratios and its security characteristics is observed when canonical correlation analysis is applied, rather than attempts to measure the volatile relationships between the individual variables. It is seen from a sample of 32 firms for the period...

This paper reports an empirical investigation of the industry effects on the interrelationships between financial ratios. Factor and transformation analysis have been used for this purpose. The data used in the study consist of 74 failed and 74 "non-failed" firms from three industries....