Financial Ratio Analysis: An Application to US Energy Industry

M. Goto and T. Sueyoshi
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M. Goto: Central Research Institute of Electric Power Industry
T. Sueyoshi: New Mexico Institute of Mining & Technology

Chapter 3 in Productivity, Efficiency, and Economic Growth in the Asia-Pacific Region, 2009, pp 59-79 from Springer

Abstract: Discriminant Analysis (DA) is a decisional tool that can predict group membership of a newly sampled observation. In DA, a group of observations whose memberships are already identified is used for the estimation of weights (or parameters) of a discriminant function by some criteria such as the minimization of misclassifications, or the maximization of correct classifications. A new sample is classified into one of the several groups by DA results. The remaining sections of this article are organized as follows: Section 3.2 provides a brief literature review that indicates the position of this research among the existing literature on DA. A review of FRA is methodologically discussed in Sect. 3.3. Section 3.3 also documents the formulation for the multiple group classification and the characteristics of the FRA methodology. The FRA is applied to a data set on the US energy industry in Sect. 3.4. Concluding comments and future extensions are summarized in the last Sect. 3.5.

Keywords: Operational Research; Financial Performance; Energy Industry; Financial Index; Goal Programming Model (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/978-3-7908-2072-0_4

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