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...

Factor and transformation analysis are used to find stable categories of financial ratios, and to test hypotheses concerning accrual ratios, cash flow ratios, and market-based ratios. Six stable factors are observed for Finnish data covering 1974-84. Contrary to expectations market-based ratios...

This paper presents a realistic simulation testbench for evaluating the various methods for estimating the long-term profitability of business firms in terms of the internal rate of return (IRR) of their capital investments. The simulation model extends the earlier, rigid approaches by...