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Financial Ratio Analysis: An Application to US Energy Industry

  • M. Goto
  • T. Sueyoshi
Part of the Contributions to Economics book series (CE)

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 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  • M. Goto
    • 1
  • T. Sueyoshi
    • 2
    • 3
  1. 1.Central Research Institute of Electric Power IndustryTokyoJapan
  2. 2.Department of ManagementNew Mexico Institute of Mining & TechnologySocorroUSA
  3. 3.National Cheng Kung UniversityTainanTaiwan

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