Skip to main content
Article
Ranking of Financial Ratios
Journal of International Finance and Economics
  • Aimao Zhang, Georgia Southern University
  • Scott N. Kersey, Georgia Southern University
Document Type
Article
Publication Date
12-1-2015
DOI
10.18374/JIFE-15-4.6
Disciplines
Abstract
Financial ratios have been used in various models to predict stock price since the 1960's (Altman, 1968). A few prominent models include the Piotroski score (Piotroski 2000), Fama-MacBeth regression (Fama & MacBeth, 1973), and the F-R model (Francis & Rowell,1978). Financial ratios used in these models vary from macroeconomic (for example, consumer inflation or the unemployment rate) to financial, such as the quick ratio. This paper is the first effort to rank these financial ratios. In this study, we apply a stepwise analysis of data from 2086 firms to show that out of 32 ratios, 6 ratios are most important for predicting firm performance.
Citation Information
Aimao Zhang and Scott N. Kersey. "Ranking of Financial Ratios" Journal of International Finance and Economics Vol. 15 Iss. 4 (2015) p. 67 - 72
Available at: http://works.bepress.com/scott_kersey/18/