QR Code Link : Type : Academic Journal Main Author : Assoc. Prof. Dr. Ben Chin-Fook Yap , Prof. Dr. Zulkifflee Mohamad , Asst. prof. Dr. K-Rine Chong Title : The Application Of Principal Component Analysis In The Selection Of Industry Specific Financial Ratios Varying Form of Title : Journal of Economics, Management and Trade, Vol. 3(3), (2013), Pages 242-252. Content Type : still image (rdacontent) Media Type : computer (rdamedia) Carrier Type : online resource (rdacarrier)

Publisher : Journal of Economics, Management and Trade Year of Publication : 2013 Summary : This paper investigates the application of principal component analysis in the selection of financial ratios that are significant and representative for two industry sectors in Malaysia. Companies in different industries, even in the same country, have different operational, market and capital structures. Therefore, to use ratios that are found to be useful for one industry sector may not be valid for companies in another industry sector. Place and Duration of Study: Malaysia. Secondary data from 2006 to 2010. Methodology: 70 companies each from the consumer and trading and services sector respectively are randomly selected and analysed over a period of five years. An initial set of 28 financial ratios were factor analysed to obtain a smaller set of significant and useful ratios. The results showed that only seven and nine ratios out of 28 for each sector respectively were identified as representative ratios. It is found that three ratios, cash flow to total assets, long-term debts to shareholders’ funds and current assets turnover, are the only ratios that were selected for both industries indicating that these three ratios are considered equally useful for these two industries while the others are more specific to their industry sector Corporate Name : UNIRAZAK Library PDF Guest : Click to view PDF file

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