On the Stability of the Classification of Financial Ratios; An
Application of Factor and Transformation Analysis
Paavo Yli-Olli and Ilkka Virtanen
Abstract
The purpose of this study is to give a contribution to the
methodological debate in the area of financial ratios. First,
existing classifications for financial ratios are surveyed. After that
an empirical classification system based on factor analysis is
introduced. The stability of the emergent financial patterns during
the subperiods of the whole period under study is examined by
transformation analysis of the factorial data.
(Proceedings of The University of Vaasa, Research
Papers No. 117 (1986), 36 p.)