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March 18, 2026The Accounting Review

On the Usefulness of Financial Ratios to Investors in Common Stock.

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Authors

MOMelvin C. O'ConnorFinancial Research (Hungary)

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Overview

This article examines financial ratios' ability to predict rate of return rankings in common stock, suggesting significant market effects.

Key Points

  • The research investigates how financial ratios can help investors predict future rate of return rankings on common stock.
  • Analyzed the relationship between financial ratios and rate of return on common stock.
  • Tested predictive ability for rate of return rankings.
  • Compared unadjusted rate of return to market adjusted rate of return.
  • Found strong evidence of a market effect on rate of return of common stock.
  • Demonstrated that financial ratios significantly influence return rankings.

Cite This Study

Melvin C. O'Connor (1973) studied this question.

synapsesocial.com/papers/69ba424e4e9516ffd37a27b0https://doi.org/10.2308/tar-4497691
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1On the Usefulness of Financial Ratios to Investors in Common Stock: A Reply.1974
  2. 2Some Empirical Bases of Financial Ratio Analysis.1965 · 2 citations
  3. 3Ratio Analysis and Efficient Markets in Introductory Financial Accounting.1982
  4. 4On the Usefulness of Financial Statement Information: A Suggested Research Approach.1970
  5. 5The Effect of Risk on the Use of Financial Statements by Investment Decision-Makers: A Case Study.1973