A Cross-Industry Analysis of Financial Ratios: Comparabilities and Corporate Performance

(Hardback)

Publishing Details

Classifications

Physical Properties

Description

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. 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 32 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 the type of research and possibilities for its extension.

Reviews

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 *

Author Bio

J. Edward Ketz is associate professor of accounting and MIS in the College of Business Administration at Pennsylvania State University. Rajib K. Doogar is a PhD candidate in the Department of Accounting and MIS at Pennsylvania State University. David E. Jensen is assistant professor of accounting at Bucknell University.