Abstract
Balance sheets and income statements are numerical decompositions of certain total sums: total assets, total liabilities, total sales, and total costs and expenses. The behavior of individual items measured as fractions of the corresponding total is important for the analysis of the company’s financial position. It will be argued in this article that certain concepts derived from information theory are useful as summarizing descriptive devices for changes in such fractions as well as for the analysis of differences between companies of the same industry.
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© 1992 Springer Science+Business Media Dordrecht
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Theil, H. (1992). On the Use of Information Theory Concepts in the Analysis of Financial Statements. In: Raj, B., Koerts, J. (eds) Henri Theil’s Contributions to Economics and Econometrics. Advanced Studies in Theoretical and Applied Econometrics, vol 25. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2408-9_26
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DOI: https://doi.org/10.1007/978-94-011-2408-9_26
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-5062-3
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