Counting since 19.11.2005
<http://lipas.uwasa.fi/~ts/wbfa/wbfa.htm> URN:NBN:fi-fe20051937
Copyright © 2002-2005 by Prof. Timo Salmi, Prof. Jussi Nikkinen & Prof. Petri Sahlström
Paper last modified Thu 24-Nov-2005 11:57
Subsequent references last appended 30-Nov-2009

Timo Salmi, Jussi Nikkinen &Petri Sahlström
Department of Accounting and Finance
Faculty of Business Studies
University of Vaasa, Finland

The Review of the Theoretical and Empirical Basis of Financial Ratio Analysis Revisited

With the Modern Developments in the Web-Based Publishing

Abstract

This web-based publication is an addendum to a previous review of the research and research trends in financial ratio analysis. The first purpose is to add more current references to the previous review. The second purpose is to emphasize the changes facilitated by the modern World Wide Web based publication practices and their impact on the availability of scientific publications. The new references are listed only without detailed reviewing, since no drastic additions have come to the fore in the field. However, it is felt that the additions are sufficient to warrant this addendum made readily possible by the option of making this publication available online.

Keywords: Financial statement analysis, financial ratios, review, electronic publishing

Referencing: Salmi, Timo, Jussi Nikkinen & Petri Sahlström (2005). The Review of the Theoretical and Empirical Basis of Financial Ratio Analysis Revisited. University of Vaasa, Finland. URN:NBN:fi-fe20051937. Available from World Wide Web: <URL:http://www.uwasa.fi/~ts/wbfa/wbfa.htm>.

Acknowledgements for useful discussions: Prof. Ilkka Virtanen and Library Managing Director Vuokko Palonen.

Purpose

Salmi and Martikainen (1994) presented a review of the theoretical and empirical basis of financial ratio analysis. In particular, the review sought to answer two questions relating to four selected fields in financial ratio analysis literature: What are the major research lines in financial statement analysis research? What is the logical chronology and what are the central results in the primary four of these fields? The motivation for the review was the fact that the interested parties need to know the nature and the quality of the financial information available and how to interpret and utilize it in their decision making.

The presentation at hand is based on the two developments discussed below:

Since the review paper there have been two developments in the field. Over a decade has passed. Naturally, there have been the further results. Hence, the first purpose of the current publication is simply to bring the references of Salmi's and Martikainen's review better up to date in a readily available mode.

There also is an interesting, first emerging and now strongly growing trend to make scientific results available on the Internet. The new technology affects the availability and access methods to scientific journals and web-based publications. The new options for world-wide publication of material and results will also have implications on the quality control of the scientific results. The often overly long and strenuous double-blind referee system will encounter inevitable pressures for the more options and maybe even fundamental changes.

Consequently, the second purpose of the current publication is to observe the transition towards scientific journal web access. It is done by examining the case of the availability of the additional financial analysis literature material on the World Wide Web in the four areas covered by Salmi and Martikainen (1994). The method is straightforward. The new references are sought by the direct university personal computer access methods only. The results in this respect are given by including into most of the references section when and how the individual reference was obtained. The particular medium of presenting the current publication is utilized in displaying this aspect of our research results. The information is color-coded in the references section to clearly distinguish the latter research task results from the first research task posed.

As for financial statement analysis reseach, the generic conclusion in Salmi and Martikainen (1994: 426) is "It is observed that it is typical of financial ratio analysis research that there are several unexpectedly distinct lines with research traditions of their own". A number of research lines were observed. Four of the areas were taken under a closer review.

Basic Properties of Ratios
1. Functional Form of Financial Ratios
2. Distributional Characteristics of Financial Ratios
3. Classification of Financial Ratios
  1. Pragmatical Empiricism
  2. Deductive Approach
  3. Inductive Approach
  4. Confirmatory Approach
Measurement of Profitability and Financial Ratios

Salmi and Martikainen (1994) also concluded. "A common feature of all the areas of financial ratio analysis research seems to be that while significant regularities can be observed, they are not necessarily stable across the different ratios, industries, and time periods." The new reference search results continue to support both the major conclusions of Salmi and Martikainen.

The reference list of the current publication covers the new material found by the authors of the publication at hand. The search for the new, published results concentrates on the areas listed above since the publication date of Salmi and Martikainen (1994). In parcticular, the emphasis is on WWW-accessible text, html, or preferably pdf versions available on the Internet. In many, if not most of the cases full access privileges to the journals in question are needed to obtain the referenced publications.

The access privileges, obviously, will differ from user to user, and may even depend on the user's physical location with regard to his/her library. Also, the access privileges to a journal may vary from year to year, based e.g. on the subscription status. In the current publication the norm, naturally, has been the Internet access to the journals via the local library services at the University of Vaasa, Finland.

Publishing Transitions

The publication of the review paper by Salmi & Martikainen (1994) very roughly coincided with the timing of the introduction of refereed papers made available more commonly also through the World Wide Web services. The net-availability status of the material is thus of interest.

It is evident that publishing has been and continues to be to a degree in a state of transition. While the paper publishing has continued in its traditional format, the electronic availability has become an option provided by publishers, albeit sometimes a cumbersome one.

It is to be expected that the changes may become more fundamental. One of the emerging trends, even if partly tentative still (in 2005 at writing this), are journals published in the electronic format only. One such example is the B>Quest WWW Journal of Applied Topics in Business and Economics.

A related, emerging trend is prepublication of submitted or forthcoming papers even before they officially come out in the paper journals. Or even papers that may not get published through the traditional channels. For example, Social Science Research Network (SSRN) provides such a service on the net.

A parallel trend that might be expected is that authors will more or less do their own publishing. The technical means are more and more readily available. The media of the World Wide Web is very well suited for this development. The publication at hand, under the auspices of the authors' university, serves as an example of this potential trend.

All the future trends are impossible to predict. However, one of the many consequences of the self-assessed publishing could be a need for a kind of a third-party certification for the web-based publications which appear as the author's own Internet publishing only.

It is self-evident that personal computers have become a major factor in doing research and in writing research papers. This will lead to a gradual shift in researchers' working habits. The trend is towards being more "desktop bound". (Although in an unrelated field, a prime example is astronomy, where observations are more and more done at the computer, not the actual observatories.) This trend will inevitably lead to the question of a risk of a potential references bias. Will references increasingly be made in an unbalanced fashion to papers that are more readily available at one's desk on the personal computer? In terms of scientific rigor, such a situation is not entirely healthy, but can it be avoided in actual research writing practice? The gradual realization of this eventuality will in time put increasing pressures on the journal publishers.

The crucial question, of course will be, the scientific status and credibility of the publications appearing on the Word Wide Web. Especially, if not published in any other format. In the end only the citation situation and the peer acceptance will tell. The familiar principles of scientific validation should apply as in the traditional publishing. The quality control will be a big issue if and when the new options of distribution proliferate.

Appendix: Dimensions of the Modern Reference Search

The potential of the new distribution technologies brings in a number of issues. The outline below attempts to list the central issues brought along by this development.

Searches:
- Traditional
  - Keyword orientation fairly typical in older databases
- Web-based
  - Search engine orientation
    - Better coverage of the contents text
    - Focusing difficulties
    - Unstandardized, sometimes outright illogical interfacing
    - Access limitations
    - Search result and fulltext-access mismatches common
Availability and typical features:
- Traditional, paper-based
  - Libraries
  - Personal subscriptions
  - Long publishing delays: the heavy referee system and typical revision rounds
  - Over-conformance problems claimed: Low acceptance rates, especially of potentially innovative new directions
- World Wide Web-based
  - Journals' electronic versions
    - Typically limited to subscribers
    - National library consortiums, e.g. FinElib
    - Libraries' journal link lists. An example
    - Personal journal link lists. An example
  - Web-only journals (emerging)
    - Savings in the high proportion of the fixed publication costs caused by low volumes
  - Working paper repositories
    - Early, worldwide access to research possibly in the review process. Example: RePEc and SSRN
  - Conference paper repositories. An example of an afterwards published paper.
  - Researcher's own pages
    - Ready access. An example
    - Undelayed publishing
    - The vanishing links syndrome ("linkrot", an example)
    - The scientific quality verification dilemma
  - Free access journals lists
    - Also a relatively recent development
    - Obviously increases a journal's attraction for Internet users
    - Exemplified by Directory of Open Access Journals
Formats:
- Traditional
  - Usually high original print quality
  - But remote library Xerox copies often of a lousy quality
  - No technical aids for searches possible
  - Cut-and-paste stalling ideology
- Web-based
  - PDF-format dominates
    - Basically but a method to transfer the paper copy over the net
    - High facsimile value
    - Cumbersome for electronic reading
    - Cut-and-paste stalling ideology
    - Sometimes sluggish search facilities
  - Some HTML, sometimes as an additional option
    - A true product of the web-age
    - Highly convenient for electronic access
    - Deviation from the (potential) original format
      - Especially deficient in page numbering
      - Occasional compatibility problems (Netscape/Internet Explorer)
    - Problems with drawings and mathematical presentation
    - At best if (and only if?) originally planned for the format

References, with Select Comments on Availability and Format

"Linkrot" is inevitable, especially given that the publishers tend to make changes in their electronic arrangements. Nevertheless, even the potential, superficially dead links will give the reader an indication of the direction to take. The temporal volatility of the availability of full texts and the variance in the access paths and formats is of note.

Functional Form of Financial Ratios

Huff, Patricia Lee, Robert M. Harper Jr & A. Elaine Eikner (1999). Are there differences in liquidity and solvency measures based on company size? American Business Review 17:2, 96-106. Available for authorized users in the PDF and HTML formats from Internet: ABI Inform ProQuest Direct [Cited 3-Oct-2002]. Database search keywords used: financial ratio proportionality.

Kallunki, Juha-Pekka, Teppo Martikainen & Jukka Perttunen (1996). The proportionality of financial ratios: Implications for ratio classifications. Applied Financial Economics, 6:6, 535-541. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 24-Sep-2002].

McLeay, Stuart & Duarte Trigueiros (2002). Proportionate growth and the theoretical foundations of financial ratios. Abacus 38:3, 297-316. Available for authorized users in the PDF format from Internet: SwetsnetNavigator [Cited 15-Oct-2002].

Osteryoung, Jerome, Richard L. Constand & Donald Nast (1992). Financial Ratios in Large Public and Small Private Firms. Journal of Small Business Management, 30:3, 35-46. Available for authorized users in the PDF and HTML formats from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. ABI Inform: ProQuest Direct database search keywords used: financial ratio proportionality.

Sudarsanam, P. S. & R. J. Taffler (1995). Financial ratio proportionality and inter-temporal stability: An empirical analysis. Journal of Banking & Finance, 19:1 45-60. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 11-Nov-2002 and 7-Sep-2005]. ABI Inform: ProQuest Direct database search keywords used: financial ratio proportionality.

Trigueiros, Duarte (1997). Non-proportionality in ratios: an alternative approach. The British Accounting Review 29:3, 213-230. Available for authorized users in the PDF format from Internet: IDEAL at FinELib [Cited 2-Oct-2002]. ScienceDirect database search keywords used: financial ratio & proportionality.

Distributional Characteristics of Financial Ratios

Ashton, David, Paul Dunmore & Mark Tippett (2004). Double Entry Bookkeeping and the Distributional Properties of a Firm's Financial Ratios. Journal of Business Finance & Accounting 31:5-6, 583-606. [Cited 2-Nov-2004]. Only the abstract could be downloaded.

Biekpe, Nicholas, Mark Tippett, & Roger Willett (1998). Accounting earnings, permanent cash flow and the distribution of the earnings to price ratio. The British Accounting Review 30:2, 105-140. Paper copy obtained before the current project. Abstract only at ABI Inform ProQuest. [Cited 19-Nov-2005]. ScienceDirect fulltext would be available for authorized users in the PDF format.

Constand, Richard L. (1994). Financial ratios in Japanese and U.S. firms: A comparison of distributional characteristics. Global Finance Journal 5:2, 237-264. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 24-Sep-2002]. Database search keywords used: financial ratio distribution.

Cudd, Mike & Rakesh Duggal (2000). Industry Distributional Characteristics of Financial Ratios: An Acquisition Theory Application. The Financial Review 35:1, 105-120. Available for authorized users in the PDF and HTML formats from Internet: EBSCOhost at FinELib [Cited 25-Sep-2002]. [Public abstract. No more valid on 7-Sep-2005]. Database search keywords used: financial ratio distribution.

Fuller-Love, Nerys, Huw Rhys & Mark Tippett (1995). Harmonic analysis, time series variations and the distributional properties of financial ratios. Omega 23:4, 419-427. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 29-Sep-2002]. [Public abstract]

Jordaan, A.C., E.v.d.M. Smit & W.D. Hamman (1994). An investigation into the normality of the distributions of financial ratios of listed South African industrial companies. South African Journal of Business Management 25:2, 65-71. Available for authorized users in the HTML format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. Problematic formatting technically.

Kallunki, Juha-Pekka (1998). The impact of transformations on the distributional properties of financial ratios: Finnish evidence. Advances in International Accounting 11, 155-168. No fulltext available.

Konings, Josef & Filip Roodhooft (1997). Financial ratio cross-section dynamics: A non-parametric approach. Journal of Business Finance & Accounting 24:9/10, 1331-1342. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 30-Sep-2002]. [Public abstract] ABI Inform: ProQuest Direct search keywords used: financial ratio distribution.

Lau, Hon-Shiang, Amy Hing-Ling Lau & Donald W. Gribbin (1995). On modeling cross sectional distributions of financial ratios. Journal of Business Finance & Accounting, 22:4, 521-549. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. ABI Inform: ProQuest Direct database search keywords used: financial ratio distribution. The size of the PDF initially caused computer problems.

Martikainen, Teppo, Jukka Perttunen, Paavo Yli-Olli & A. Gunasekaran (1995). Financial ratio distribution irregularities: Implications for ratio classification. European Journal of Operational Research 80:1, 34-44. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 27-Sep-2002].

Mcleay, Stuart (1997). Boundary conditions for ratios with positively distributed components. Journal of Business Finance & Accounting 24:1, 67-83. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 27-Sep-2002].

Mcleay, Stuart & Azmi Omar (2000). The sensitivity of prediction models to the non-normality of bounded and unbounded financial ratios. The British Accounting Review 32:2, 213-230. Available for authorized users in the PDF format from Internet: IDEAL at FinELib [Cited 25-Sep-2002]. Database search keywords used: financial ratio distribution.

Nikkinen, Jussi & Petri Sahlström (2004). Distributional Properties and Transformation of Financial Ratios: The Impact of Accounting Environment. Advances in International Accounting 17, 85-101. The search initiated from the first author's home page. [Cited 17-Nov-2005]. No fulltext, but the issue is moot for the present authors, since the paper is by two of them.

Peel, David A., Michael J. Peel & Ioannis A. Venetis. Further Empirical Analysis of The Time Series Properties of Financial Ratios based on a Panel Data Approach. Publication status unknown. Source: A Google search-engine link. Probably still unpublished, but available on the Internet.

Peel, David A, & Michael J Peel, Joannis A Venetis (2004). Further empirical analysis of the time series properties of financial ratios based on a panel data approach. Applied Financial Economics 14:3, 155-. Abstract at ABI Inform ProQuest [Cited 12-Nov-2004]. Only the abstract was downloadable.

So, Jacky C. (1994). The distribution of financial ratios - A note. Journal of Accounting, Auditing & Finance, 9:2, 215-223. ABI Inform: ProQuest Direct. Database search keywords used: financial ratio distribution. A note: No fulltext rights for this issue at the University of Vaasa. Hence a paper copy received 21-Nov-2002.

Trigueiros, Duarte (1995). Accounting identities and the distribution of ratios. The British Accounting Review 27:2, 109-126. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 2-Oct-2002]. ScienceDirect database search keywords used: financial ratio & proportionality.

Classification of Financial Ratios

Devine, Kevin & Lloyd Seaton (1995). An examination of quarterly financial ratio stability: Implications for financial decision making. Journal of Applied Business Research 11:1, 81-97. Available for authorized users in the HTML format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. Database search keywords used: financial ratios classification factor analysis Pinches.

Flex Monitoring Team (2005). Financial Indicators for Critical Access Hospitals. Flex Monitoring Team Briefing Paper No. 7. Universities of Minnesota, North Carolina at Chapel Hill, and Southern Maine. Available freely on the Internet. [Cited 19-Nov-2005]. Google Advanced Search keywords used: classification financial ratios "financial ratio analysis".

Martikainen, Teppo, Jukka Perttunen, Seppo Pynnönen & Paavo Yli-Olli (1997). A confirmatory test on the stability of financial ratio patterns. Advances in Quantitative Analysis of Finance and Accounting 5 (alternative), 137-160. No fulltext available.

Matsumoto, Keishiro, Melkote Shivaswamy & James P. Hoban, Jr. (1995). Security analysts' views of the financial ratios of manufacturers and retailers. Financial Practice & Education 5:2, 44-55. Available for authorized users in the PDF and HTML formats from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. Database search keywords used: financial ratios classification Pinches. Inconsistent author information.

Watkins, Ann L. (2000). Hospital financial ratio classification patterns revisited: Upon considering nonfinancial information. Journal of Accounting and Public Policy 19:1, 73-95. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 6-Oct-2002]. EBSCOhost database search keyword used: financial ratio classification.

Zeller, Thomas L., Brian B. Stanko & William O. Cleverley (1996). A revised classification pattern of hospital financial ratios. Journal of Accounting and Public Policy 15:2 161-181. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 4-Nov-2002].

Zeller, Thomas L., Brian B. Stanko & William O. Cleverley (1997). A new perspective on hospital financial ratio analysis. Healthcare Financial Management 51:11, 62-66. Available for authorized users in the html and PDF formats from EBSCOhost and ABI Inform: ProQuest Direct [Cited 19-Nov-2005]. Google Advanced Search keywords used: "financial ratio analysis" "factor analysis". Inconsistent author information at ABI.

The relative number of the hospital administration related papers in this area of financial analysis research is interesting to note.

Measurement of (IRR) Profitability and Financial Ratios

Baber, William R. & Sok-Hyon Kang (1996). Estimates of economic rates of return for the U.S. pharmaceutical industry, 1976-1987. Journal of Accounting and Public Policy 15:4, 327-356. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 7-Nov-2002]. EBSCOhost database keywords used: IRR CRR.

Bartley, Robert L. (2003). Thinking Things Over -- Debating Sarbanes-Oxley: Economic Profit vs. Accounting. Wall Street Journal (Eastern edition). June 2, A.17. ProQuest Direct. [Cited 12-Nov-2004].

Chen, Kevin C. W. (1995). Accounting measures of business performance and Tobin's q theory. Journal of Accounting, Auditing & Finance 10:3, 587-609. ABI Inform ProQuest Direct Database keywords used: accounting internal rate return profitability.

Danielson, Morris G. & Eric Press (2003). Accounting Returns Revisited: Evidence of their Usefulness in Estimating Economic Returns. Review of Accounting Studies 8:4, 493-530. ABI Inform ProQuest Direct, fulltext in PDF format [Cited 19-Nov-2005].

Elmendorf, Richard G. (1993). Accounting rates of return as proxies for the economic rate of return: An empirical investigation. Journal of Applied Business Research 9:2, 62-75. Available for authorized users in the HTML format from Internet: ABI Inform ProQuest Direct [Cited 3-Oct-2002]. Database search keywords used: rate of return profitability measuring.

Feenstra, Dick W., Carel A. Huijgen & Hua Wang (2000). An Evaluation of the Accounting Rate of Return: Evidence for Dutch Quoted Firms. SOM-theme E Financial markets and institutions Available freely in the PDF format from Internet: <URL:http://www.ub.rug.nl/eldoc/som/e/00E55/00E55.pdf> [Cited 4-Oct-2002]. Google database search keywords used: profitability accounting "internal rate of return".

Fritsche, Steven R. & Michael T. Dugan (1996). Bias and random measurement error in accounting-based surrogates for internal rate of return. Journal of Applied Business Research 12:2, 58-74. Available for authorized users in the PDF format from Internet: ABI Inform ProQuest Direct [Cited 4-Oct-2002]. Database keywords used: accounting internal rate return profitability. Inconsistent author information.

Fritsche, Steven R. & Michael T. Dugan (1997). A simulation-based investigation of errors in accounting-based surrogates for internal rate of return. Journal of Business Finance & Accounting 24:6, 781-802. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. Database keywords used: IRR ARR.

Gordon, Lawrence A. & Raghavan J. Iyengar (1996). Return on investment and corporate capital expenditures: empirical evidence. Journal of Accounting and Public Policy 15:4, 305-325. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 7-Nov-2002].

Kelly, Gary (1996). Accounting and economic rates of return: additional Australian evidence. Journal of Accounting and Public Policy 15:4, 347-372. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 4-Oct-2002]. Ingenta database keywords used: economic accounting rate return.

Laitinen, Erkki K. (1997). Estimation of Internal Rate of Return Under Nonsteady Conditions. Journal of Business Finance & Accounting 24:9/10, 1217-1251. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 30-Sep-2002]. [Public abstract]

Lefley, Frank & Joseph Sarkis (1997). The decline of the accounting rate of return (ARR). Management Accounting: Magazine for Chartered Management Accountants 75:6, 50-51. Available for authorized users in the HTML format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002].

Peasnell, Kenneth V. (1996). Guest editorial. Using accounting data to measure the economic performance of firms. Journal of Accounting and Public Policy 15:4, 291-303. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 7-Nov-2002].

Salmi, Timo & Ilkka Virtanen (1997). Measuring the Long-Run Profitability of the Firm; A Simulation Evaluation of the Financial Statement Based IRR Estimation Methods. Acta Wasaensia 54. Vaasa: University of Vaasa, Finland. 66 p. ISBN 951-683-689-5. Available freely in HTML and PDF formats from Internet: <URL:http://www.uwasa.fi/~ts/smuc/smuc.html >

Salmi, Timo & Ilkka Virtanen (2001). Economic Value Added: A simulation analysis of the trendy, owner-oriented management tool. Acta Wasaensia 90. Vaasa: University of Vaasa, Finland. 33 p. ISBN 951-683-930-4. Available freely in HTML and PDF formats from Internet: <URL:http://www.uwasa.fi/~ts/eva/eva.html >.

Web-based (and other) Publishing and Usage

Colbert, Janet L., C. Richard Aldridge & Mark Ross (2001). Accounting journals related to international topics: print and electronic versions. Journal of International Accounting, Auditing & Taxation 10:1, 111-116. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 25-Sep-2002].

Teo, Thompson S. H., Vivien K. G. Lim & Raye Y. C. Lai (1999). Intrinsic and extrinsic motivation in Internet usage. Omega 27:1, 25-37. Available for authorized users in the PDF and HTML formats from Internet: ScienceDirect [Cited 3-Oct-2002]. Inconsistent author information.

Background and Miscellaneous

Bricker, Robert, Kenneth Borokhovich & Betty Simkins (2002). The impact of accounting research on finance. Critical Perspectives on Accounting 0:0 N/A (published electronically August 16, 2002), 1-22. Available online at http://www.idealibrary.com on IDEAL^®. Obtained as authorized user in the PDF format from Internet: IDEAL at FinELib [Cited 5-Oct-2002].

Brinn, Tony, Michael Jones & Maurice Pendlebury (2001). Why do UK accounting and finance academics not publish in top US journals? The British Accounting Review 33:2, 223-232. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 8-Nov-2002].

Chow, Chee W. & Paul D. Harrison (2002). Identifying meaningful and significant topics for research and publication: a sharing of experiences and insights by 'influential' accounting authors. Journal of Accounting Education 23:3, 183-203. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 18-Nov-2002].

Lukka, Kari & Markus Granlund (2002). The fragmented communication structure within the accounting academia: the case of activity-based costing research genres. Accounting, Organizations and Society 27:1-2, 165-190. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 15-Oct-2002].

Lukka, Kari & Eero Kasanen (1996). Is accounting a global or a local discipline? Evidence from major research journals. Accounting, Organizations and Society 21:7/8, 755-773. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 4-Oct-2002].

Maher, Michael W. (2001). The evolution of management accounting research in the United States The British Accounting Review 33:3, 293-305. Available for authorized users in the PDF format from Internet: ScienceDirect [Cited 8-Nov-2002].

Salmi, Timo & Teppo Martikainen (1994). A review of the theoretical and empirical basis of financial ratio analysis. The Finnish Journal of Business Economics 43:4, 426-448. Available freely from Internet: <URL:http://www.uwasa.fi/~ts/ejre/ejre.html >.

Observed, but not acquired on the web:

Fernandez-Castro, A. & P. Smith (1994). Towards a general non-parametric model of corporate performance. Omega, 22:3, 237-249. ABI Inform: ProQuest Direct. Database search keywords used: financial ratio distribution. No fulltext found. Paper copy received 21-Nov-2002.

Kane, Gregory D. & Nancy L. Meade (1997). Rank transformations in cross-sectional comparisons using ratio analysis. Journal of Financial Statement Analysis, 2:2; 61. ABI Inform: ProQuest Direct. Database search keywords used: financial ratio distribution. No fulltext found. Inconsistent author information.

Kane, Gregory & Nancy Meade (1998). Ratio Analysis Using Rank Transformation. Review of Quantitative Finance and Accounting 10:1, 59-74. Kluwer Academic Publishers Pay-Per-View content.

Tippett, Mark & Geoffrey Whittington (1995). An empirical evaluation of an induced theory of financial ratios. Accounting and Business Research 25, 208-218. No fulltext found.

Trigueiros, Duarte (1995b). Incorporating complementary ratios in the analysis of financial statements. Accounting, Management and Information Technologies 4:3, 149-162. Database used: ScienceDirect. No fulltext rights at the University of Vaasa.

Rhys, Huw & Mark Tippett (1993). On the "steady state" properties of financial ratios. Accounting and Business Research 23:92, 500-510. No fulltext found.

Pre-1994 Papers Now Available on the Internet

A small sample of papers referred to in Salmi and Martikainen (1994) which have have since become available electronically. Some publishers have increasingly started to make available for the subscribers also the older back-issues of their journals.

Courtis, John K. (1978). Modelling a financial ratios categoric framework. Journal of Business Finance & Accounting 5:4, 371-386. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 25-Oct-2002].

Fieldsend, Susan, Nicholas Longford & Stuart McLeay (1987). Industry effects and the proportionality assumption in ratio analysis: A variance component analysis. Journal of Business Finance & Accounting 14:4, 497-517. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002].

McLeay, Stuart & Susan Fieldsend (1987). Sector and size effects in ratio analysis: an indirect test of ratio proportionality. Accounting and Business Research 17:66, 133-140. ABI Inform ProQuest Direct [Cited 3-Oct-2002]. Database search keywords used: financial ratio proportionality. Inconsistent author information.

So, Jacky C. (1987). Some Empirical Evidence on the Outliers and the Non-Normal Distribution of Financial Ratios. Journal of Business Finance & Accounting 14:4, 483-496. Available for authorized users in the PDF format from Internet: EBSCOhost at FinELib [Cited 5-Oct-2002]. ABI Inform: ProQuest Direct database search keywords used: financial ratio distribution.

Yli-Olli, Paavo & Ilkka Virtanen (1989). On the long-term stability and cross-country invariance of financial ratio patterns. European Journal of Operational Research 39:1, 40-53. [Abstract cited 18-Nov-2005]. ScienceDirect, journal's backissues. Search initiated at the second author's home page. ScienceDirect fulltext would be available for authorized users in the PDF format.

Examples of Web Encyclopedia Links

Financial ratio analysis. At Encyclopædia Britannica.
Financial ratio | Financial analysis. At Wikipedia, the free encyclopedia.

Library Journal Database and Search Engine Links Used in the Searches (2002-2005):

ABI Inform: ProQuest Direct
EBSCOhost Research Databases at FinELib National Electronic Library (FinELib licensed)
Elsevier Science: Browse
Emerald
ingenta search
ScienceDirect
SwetsWise Online
Journals Indexed in EconLit

Google Advanced Search
Journals in Accounting, Finance and OR for Research

Relevant Papers Found after the Original Publication Date (24-Nov-2005)

Bhattacharya, Hrishikes (2007). Advent, Development and Use of Ratios - A Managerial Perspective (March 20, 2007). Available at SSRN: http://ssrn.com/abstract=975248 [Cited 2-Feb-2008].

Kihn, Lili-Anne (2005). Comparing Performance Measurement Approaches in Accounting Research. The Finnish Journal of Business Economics, 2/05, 143-184. (Summary) [Cited 3-Feb-2008].

Maggina, Anastasia G. (2008). On the distributional properties of financial ratios in annual reports of Greek listed companies. International Journal of Managerial and Financial Accounting, 1:2, 166-183. [Cited 19-Jan-2009] doi:10.1504/IJMFA.2008.021240

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