TIME-SERIES DISTRIBUTIONAL PROPERTIES OF FINANCIAL RATIOS - EMPIRICAL-EVIDENCE FROM FINNISH LISTED FIRMS

The distributional properties of time-series accounting numbers are studied. First, the distributional characteristics of raw financial ratio distributions are investigated. Second, the normality of the accounting index model residuals is researched. By doing this one aims to consider the firm-specific and economy-wide effects on the observed nonnormalities in financial ratio distributions. Empirical evidence indicates that a substantial part of the nonnormalities in financial ratio distributions is caused by economy-wide effects.