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Unlisted Businesses are Not Financial Clones of Listed Businesses

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  • Ed Vos

Abstract

Benchmarks for judging financial performance are often found by using financial statement ratio analysis. Ratios of the publicly listed sector are not good surrogates for those of the unlisted sector. Observations of 209 financial statements from the unlisted sector (“small†) when compared to all publicly listed companies in New Zealand for the period 1984-1987 show larger ranges and variability for the unlisted sector. Unlisted companies’ financial ratios and their correlations cannot be considered the same as those of the listed companies. Caution is required before any use is made of listed companies’ performance ratios for judgments on unlisted companies.

Suggested Citation

  • Ed Vos, 1992. "Unlisted Businesses are Not Financial Clones of Listed Businesses," Entrepreneurship Theory and Practice, , vol. 16(4), pages 57-68, July.
    • Handle: RePEc:sae:entthe:v:16:y:1992:i:4:p:57-68
    DOI: 10.1177/104225879201600404
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    References listed on IDEAS

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    1. Vos, Ed & Yeh, Andy Jia-Yuh & Carter, Sara & Tagg, Stephen, 2007. "The happy story of small business financing," Journal of Banking & Finance, Elsevier, vol. 31(9), pages 2648-2672, September.

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