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A Note on the Financial Variable and Ratio Structure of New Zealand Listed Companies *
Author(s) -
Mear Ross,
Firth Michael
Publication year - 1986
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.1986.tb00073.x
Subject(s) - solvency , profitability index , market liquidity , variables , variable (mathematics) , business , accounting , econometrics , economics , actuarial science , finance , statistics , mathematics , mathematical analysis
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 labelled 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.