AN EMPIRICAL EVALUATION OF THE COLLINEARITY AND CORRELATION OF FINANCIAL RATIOS IN BUSINESS ORGANISATIONSWest African Journal of Business (2006)
AbstractFinancial ratios are assumed to be very useful predictors of business performance, growth and financial status. This study evaluates the cohlinearity and correlation of financial ratios to establish a pattern of relationship that could serve s n empirically supported guide for financial ratios reliance in business evaluation decisions. The research data were gathered from the annual account report of vita foam Plc and analyzed using collinearity and correlation to test the research propositions. The paper found the existence of correlation and collinearity in the financial ratios, and concludes that financial ratios are reliable business status indicators. We therefore recommend the application of financial ratios in the evaluation of business performance, growth and financial strength.
Citation InformationThankGod C Agwor. "AN EMPIRICAL EVALUATION OF THE COLLINEARITY AND CORRELATION OF FINANCIAL RATIOS IN BUSINESS ORGANISATIONS" West African Journal of Business Vol. 8 Iss. 1 (2006)
Available at: http://works.bepress.com/thankgod_agwor/3/