The Distribution Properties of the Financial Ratios of Listed South African Industrial Companies: 1980–1989

Abstract

Financial ratios are widely used tools in financial statement analysis, where often the assumption of normality in the ratio distributions has to be made. The article examines the distributions of nine financial ratios for listed South African industrial companies over the period 1980–1989 both on an industry and sectoral level. It is shown that the normality assumption does not hold in a large percentage of cases tested.