Premium
ACCOUNTING RATIOS TO LOCATE TAKE‐OVER TARGETS
Author(s) -
Rege Udayan P.
Publication year - 1984
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1984.tb00751.x
Subject(s) - leverage (statistics) , univariate , market liquidity , profitability index , accounting , population , business , accounting information system , cash flow , multivariate statistics , economics , finance , statistics , demography , mathematics , sociology
This paper uses both the univariate and multivariate techniques to discover whether liquidity, leverage, payout, activity, and profitability ratios can distinguish non‐taken‐over, domestic taken‐over and foreign taken‐over firms in Canada. The results indicate that the three categories of firms emanate from the same population, and the article concludes that even if a connection between historical accounting information and the firm's expected cash flows were to be hypothesized, the semi‐strong efficient capital market would ensure that accounting information would be impounded in the prices of securities of target firms.