Multivariate distributional properties, outliers, and transformation of financial ratios
Article Abstract:
Accounting studies using financial ratio data typically assume that the ratios display multivariate normal distributions, but previous research on financial ratios' cross-sectional distributions generally has been univariate although the models assume multivariate normality. An examination of multivariate distributional properties, modified power transformations, and multivariate outliers was conducted to approximate the multivariate normality of financial ratios' cross-sectional distributions. The application of power transformation to the financial ratios and the deletion of multivariate outliers resulted in approximate multivariate normality. Research results indicate that power transformation and multivariate outliers can be used for improving statistical conclusion values, thus improving decision models' effectiveness.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
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The achievability of budget targets in profit centers: a field study
Article Abstract:
The choice of annual profit center budget targets among managers of corporations with multiple divisions is examined. Data was collected from 54 profit centers in 12 corporations. Results indicate that budgets are targetted to be met an average of eight or nine years out of ten. The findings go against most management textbooks which suggest that budgets should be targetted to be achieved less than half the time. Self report by managers maintains that highly achievable budgets still provide motivation and challenge.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1989
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