IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v15y1969i9p459-480.html
   My bibliography  Save this article

On the use of Information Theory Concepts in the Analysis of Financial Statements

Author

Listed:
  • Henri Theil

    (The University of Chicago)

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.

Suggested Citation

  • Henri Theil, 1969. "On the use of Information Theory Concepts in the Analysis of Financial Statements," Management Science, INFORMS, vol. 15(9), pages 459-480, May.
    • Handle: RePEc:inm:ormnsc:v:15:y:1969:i:9:p:459-480
    DOI: 10.1287/mnsc.15.9.459
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.15.9.459
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.15.9.459?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. E. M. S. Ribeiro & G. A. Prataviera, 2014. "Information theoretic approach for accounting classification," Papers 1401.2954, arXiv.org, revised Sep 2014.
    2. Ribeiro, E.M.S. & Prataviera, G.A., 2014. "Information theoretic approach for accounting classification," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 416(C), pages 651-660.
    3. Jarmila Horváthová & Martina Mokrišová & Martin Bača, 2023. "Bankruptcy Prediction for Sustainability of Businesses: The Application of Graph Theoretical Modeling," Mathematics, MDPI, vol. 11(24), pages 1-20, December.
    4. Şaban Çelik & Bora Aktan & Bruce Burton, 2022. "Firm dynamics and bankruptcy processes: A new theoretical model," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(3), pages 567-591, April.
    5. Michael H. Senteney & David L. Stowe & John D. Stowe, 2020. "Financial statement change and equity risk," Review of Financial Economics, John Wiley & Sons, vol. 38(1), pages 63-75, January.
    6. Smimou, K. & Bector, C.R. & Jacoby, G., 2007. "A subjective assessment of approximate probabilities with a portfolio application," Research in International Business and Finance, Elsevier, vol. 21(2), pages 134-160, June.
    7. Raghbendra Jha & Ibotombi Longjam, 2008. "A Divisia type saving aggregate for India," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 1(1), pages 51-66.
    8. Jobst, Andreas A., 2013. "Multivariate dependence of implied volatilities from equity options as measure of systemic risk," International Review of Financial Analysis, Elsevier, vol. 28(C), pages 112-129.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:15:y:1969:i:9:p:459-480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.