A note on the financial variable and ratio structure of New Zealand listed companies

Article Abstract:

This paper reports the results of an investigation into the financial structure of accounting variables and ratios of New Zealand listed firms. Seven major factors were identified and these accounted for more than 82 percent of the information contained in a set of forty-four variables. These factors are labeled profitability, size, activity, solvency, liquidity, growth in size and, growth in profits-profitability. Although the first five factors have also been identified as separate corporate dimensions in studies conducted in the United States and elsewhere, variables representing growth have not been examined before. Our study suggests that the growth variables represent two distinct and significant factors. (Reprinted by permission of the publisher.)

Accounting, Financial statements, Ratio analysis

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Assessing the accuracy of financial analyst security return predictions

Article Abstract:

Two distinct methodologies are employed to assess the accuracy of financial analyst security return prediction: correlation analysis, and forecast error metric analysis. The performance of the analyst is assessed relative to a variety of statistical models, a 'naive' prediction model, and a prediction model that is theoretically derived. Results of the error metric and correlation analyses give contrasting indications of financial analyst performance.

Evaluation, Investment advisers, Financial analysts, Error analysis (Mathematics), Correlation (Statistics)

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A note on the predictability of financial distress in New Zealand listed companies

Article Abstract:

Multiple discriminant analysis is applied to financial ratios of New Zealand listed companies and a model developed which exhibits better classification ability than other New Zealand-based models. The predictive ability of the New Zealand model is tested on a hold-out sample of listed companies and performs reasonably well for predictions close to the point of failure. (Reprinted by permission of the publisher.)

Models, Business failures

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