From ts@uwasa.fi  Mon Dec 31 12:00:00 2019
From: ts@uwasa.fi (Timo Salmi)
Subject: pc/pd2/tsrese01.zip file description
To: ts@uwasa.fi  (Timo Salmi)
Date: Mon, 31 Dec 2019 12:00:00 EET
X-IMAPbase: 1125046376 6
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+---------------------------------------------------------------+
! This file is in mail format, so you can also read it with any !
! suitable Unix mail program such as elm: (elm -f rese01.txt).  !
! On a PC /pc/mail/rmail*.zip is a convenient alternative       !
+---------------------------------------------------------------+

   I have some research papers available in the electoronic format
in at the http://garbo.uwasa.fi/pc/research.html directory and in
part also as http://lipas.uwasa.fi/~ts/publicat/publicat.html. This
is  the first file that contains my replies and comments on those
papers that I or others have made by email, or just written here
instead of posting to the Usenet news.

   Note that the latest tsrese??.zip is always being updated until
it contains 30 messages. The files are located at the /pc/ts
directory.
   For an index of all the completed tsrese*.zip files please see
ftp://garbo.uwasa.fi/pc/pd2/tspost00.zip.

Please note that this index is in reverse order:
1   Dec 31 Timo Salmi         (34)   pc/pd2/tsrese01.zip file description
2   Aug 18 Timo Salmi         (88)   Re: Finnish accounting system
3   Jul 2  Guangliang He      (61)   Varimax Factor Rotation Method
4   May 12 Timo Salmi         (57)   SCIENCE: Accounting papers published in Web fo
5   Apr 23 Timo Salmi         (130)  Re: Classification of Financial Ratios


From ts@UWasa.Fi Mon May 13 07:04:34 EET 1996
From: ts@UWasa.Fi (Timo Salmi)
Newsgroups: comp.infosystems.www.announce
Subject: SCIENCE: Accounting papers published in Web format
Followup-To: comp.infosystems.www.misc
Date: 12 May 1996 00:05:21 GMT
Organization: University of Vaasa, Finland
Approved: www-announce@boutell.com
NNTP-Posting-Host: boutell.com
Status: RO
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I have made available on the net with appropriate permissions of the
publishers and the co-authors the following four scientific papers.
The individual URL references are included. Alternatively, these
papers can be reached by clicking the links on my home page:

<URL:http://uwasa.fi/~ts/>

Timo Salmi and Teppo Martikainen (1994), "A Review of the
Theoretical and Empirical Basis of Financial Ratio Analysis", The
Finnish Journal of Business Economics 4/94, 426-448. Also published
on the World Wide Web as <URL:http://uwasa.fi/~ts/ejre/>

Timo Salmi (1993), "A Comparative Review of the Finnish
Expenditure-Revenue Accounting", published on the World Wide Web as
<URL:http://uwasa.fi/~ts/comp/> at the University of Vaasa, Finland.

Timo Salmi, Ilkka Virtanen and Paavo Yli-Olli (1990). On the
Classification on Financial Ratios. A Factor and transformation
analysis of accrual, cash flow, and market-based ratios. Acta
Wasaensia, No. 25., University of Vaasa, Finland. Also published on
the Word Wide Web as <URL:http://uwasa.fi/~ts/sera/>.

Timo Salmi and Ilkka Virtanen (1995). Deriving the Internal Rate of
Return from the Accountant's Rate of Return: A Simulation Testbench.
Proceedings of the University of Vaasa, Finland, No. 201, 1995. Also
published on the Word Wide Web as <URL:http://uwasa.fi/~ts/simu/>

   All the best, Timo

--
...................................................................
Prof. Timo Salmi   Co-moderator of news:comp.archives.msdos.announce
Moderating at ftp:// & http://garbo.uwasa.fi archives  193.166.120.5
Department of Accounting and Business Finance  ; University of Vaasa
ts@uwasa.fi http://uwasa.fi/~ts BBS 961-3170972; FIN-65101,  Finland


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From ts@uwasa.fi Tue Apr 23 12:10:58 1996
From: ts@uwasa.fi (Timo Salmi)
Subject: Re: Classification of Financial Ratios
To: zry@alpha3.iso.port.ac.uk(Ron Yang)
Date: Tue, 23 Apr 1996 12:10:58 +0300 (EET DST)
Cc: itv@uwasa.fi (Ilkka Virtanen), paavo.yli-olli@uwasa.fi (Paavo Yli-Olli)
X-Mailer: ELM [version 2.4ME+ PL11 (25)]
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> Dear Prof. Timo Salmi

Hello Ron Yang,

> I have read your paper called 'on the classification of financial
> ratios: a factor and transformation analysis ...'.

You are referring to

 41741 Feb 8 1993 ftp://garbo.uwasa.fi/pc/ts/tssera.zip
 tssera.zip On the Classification of Financial Ratios, research publication
 http://uwasa.fi/~ts/sera/

I am pleased to hear that you have found our scientific publication
of interest.

> I have several problems, which I could not understand

These are good and relevant questions, but they mostly are questions
of basic accounting and finance education rather than actual
research questions. Thus the general answer will be to refer you to
good accounting and finance textbooks at your library. In the case
of the background to financial statement analysis I recommend White,
Sondhi and Fried (1994), The Analysis and Use of Financial
Statements, John Wiley & Sons, Inc., New York, etc. A very good
reference for the basics needed is Rees, Bill (1995), Financial
Analysis, 2nd ed., Prentice Hall, London, etc. For you it has the
added advantage of having been written based on the British
accounting usages.

However, I'll be pleased to take you through some of the basics.

> 1. what's the meaning of 'ex-ante probability'

I can't locate the term 'ex-ante probability' anywhere in our paper.
(But such a term can exist in general. It would mean a subjective,
Bayesian type of probability.)

> 2. what's the meaning of 'ex-ante category'

Ex-ante and ex-post are terms indicate whether one looks at
something prior or after fact. Thus in the above an ex-ante category
indicates a categorization one has made based on theory and earlier
research before looking at and utilizing one's own sample or
observations.

In science these terms often relate to deduction (more of an ex-ante
concept) and to induction (more of an ex-post concept). If you are
not familiar with the difference between deduction and induction,
one suitable textbook to look at is Gill and Johnson (1991),
Research Methods for Managers, Paul Chapman Publishing Ltd., London.

> 3. what's 'accrual ratios'

On the introductory financial accounting course one learns that the
accrual basis of accounting allocates revenues and expenditures at
the point of time when the services are provided or used rather than
at the time they are paid for in cash. The financial statements,
i.e. the income statement and balance sheet, of the firm are
prepared and presented on the accrual basis, not cash basis. The
income statement and the balance sheet can be augmented with the
statement of cash flows.

The traditional financial ratios calculated directly on the basis of
the the income statement and the balance sheet are called "accrual
ratios" in our paper. The ratios involving cash flow information are
called cash flow ratios in our paper.

> 4. in 2.1.5, you mentioned 'fixed cost' & 'variable cost'. How to
> find them in company's financial statements report

This is a question of the extent of disclosure by the firm in its
financial statements. The first place to look at is the income
statement. If the information is not there, the next place to look
at is all the supplementary information in the annual report. If a
firm does not disclose this information, the information simply will
not be available, but in our sample this fortunately was not the
case. The problem is that will full costing as typically applied in
the U.S. financial statements, this information may not be available.

> 5. in 2.1.6, you mentioned 'accounting betas' & 'security betas'.
> What are the means of 'betas' there

Beta is a parameter of the well-known Sharpe, Lintner, Traynor
capital asset pricing model (CAPM) which is familiar to every
student of finance. See e.g. Brealey and Myers (1991), Principles of
Corporate Finance, 4th ed., McGraw-Hill, Inc., New York, etc. In
popular terms a beta is an individual security's return's response
to the up and down moves of the security market's index (like the
Dow-Jones index).

When one looks at a security's return's and and its reaction to the
market portfolio, one can speak of security betas. When one instead
looks at the accounting earnings of a firm and its response to the
accounting earnings of all the firms on the market one speaks of
accounting betas.

> Sorry for distrubing you.
> Many thanks.
>
> Sincerely
> Ron Yang

   All the best, Timo

> -------------------------
> Dept. of Land & Construction Management
> Portsmouth University
> UK
> zry@alpha3.iso.port.ac.uk

....................................................................
Prof. Timo Salmi   Co-moderator of news:comp.archives.msdos.announce
Moderating at ftp:// & http://garbo.uwasa.fi archives  193.166.120.5
Department of Accounting and Business Finance  ; University of Vaasa
ts@uwasa.fi http://uwasa.fi/~ts BBS 961-3170972; FIN-65101,  Finland


From ghe@superlink.net  Wed Jul  3 04:51:31 1996
Date: Tue, 02 Jul 1996 21:45:38 -0400
From: Guangliang He <ghe@superlink.net>
To: ts@uwasa.fi
Subject: Varimax Factor Rotation Method
Status: RO
X-Status: 
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Dear Professor Salmi:

 41749 Feb 8 1993 ftp://garbo.uwasa.fi/pc/research/tssera.zip
 tssera.zip On the Classification of Financial Ratios, TS + IV + PY-O
 http://uwasa.fi/~ts/sera/

I'm trying to implement the varimax factor rotation method into a simple
factor analysis module. I searched on the web and saw your article
"ON THE CLASSIFICATION OF FINANCIAL RATIOS: ...". You used the varimax
method in your article. Is it possible for you to give me some reference
about the details of varimax method, or computer algorithms, or codes?

Thank you very much.

--
Guangliang He
ghe@superlink.net


-Date: Wed, 3 Jul 1996 11:47:27 +0300 (EET DST)
-From: Ilkka Virtanen <itv@UWasa.Fi>
-To: ghe@superlink.net
-Cc: ts@UWasa.Fi (Timo Salmi)
-Subject: Re: Varimax Factor Rotation Method

Hello Guangliang He,

The varimax rotation technique is one of the standard methods in factor
analysis. A description of the technique (and of factor analysis in general)
can be found in any textbook of multivariate statistical method (you will
find one reference in our article: Johnson, R.A. & Wichern, D.W. (1982).
Applied Multivariate Statistical Analysis. Englewood Cliffs: Prentice Hall.)

Factor analysis method (including the varimax rotation technique) can be
found in any modern statistical computer package (such as SAS, SPSS, BMDP,
StatView etc.)

> Thank you very much.

You are welcome,

Ilkka Virtanen
--
Ilkka Virtanen.
Professor of Operations Research and Management Science.
Head of the Department of Mathematics and Statistics.
University of Vaasa, POB 700, FIN-65101 Vaasa, Finland
Tel. 358-61-3248256, Fax 358-61-3248557, Telex 74262 vyk sf
E-mail: itv@uwasa.fi     http://www.uwasa.fi/~itv


From ts@uwasa.fi Sun Aug 18 06:07:51 1996
Subject: Re: Finnish accounting system
From: ts@uwasa.fi (Timo Salmi)
To: ae163@dial.pipex.com (Ference Eisner)
Date: Sun, 18 Aug 1996 06:07:51 +0300 (EET DST)
Status: RO
X-Status: 
X-Keywords:                 
X-UID: 5

> Dear Professor Salmi

Hello Ference,

> I downloaded your summary of the Finnish expenditure-revenue accounting and
> read it with great interest.

I am very pleased to hear this and to receive your email. I am
sharing this response with some of my colleagues, who also might be
interested. Therefore, I am quoting your welcome email in full
below.

> We do not know much about the Finnish system here in the UK The first I
> read about it was in European Accounting by Blake and Amat. A brief
> reference was made there to a paper by Nasi.S(1990) that appeared in
> Brussels: The development of accounting thought from the middle of the last
> century to the present day in Finland.

It might also have appeared in the European Journal of Accounting. I
will have to check when I am back at my office. I am currently on
vacation.

> The British Library was unable to trace this paper, so I was very pleased
> when I found your Web page.

This confirms what I have suspected earlier. This particular paper
of mine has not appearead in any journal, but I have it from British
editors in connection with submitting another paper to a British
journal that for example the Finnish Journal of Business Economics
is not always readily available to the British audience.

As for my paper on the Finnish Expenditure-Revuenue accounting, you
might have noticed that the full paper is available both by FTP as

 19974 May 6 15:39 ftp://garbo.uwasa.fi/pc/research/tscmpacc.zip
 tscmpacc.zip Review of Finnish Expenditure-Revenue Accounting, T.Salmi

and World Wide Web: http://uwasa.fi/~ts/comp/

> You may or may not be aware that a paradigm war is going on here between
> the followers of the late Professor Solomons, who defended to his last the
> American  Balance Sheet based theories, and some English accountants who
> would like to give more prominence to the Income Statement (Profit & Loss
> here in the UK).
>
> Regrettably, the followers of US practices are in a very strong position,
> to the detriment of an intelligent debate. Theorists who try to explain
> everything in terms of Assets and Liabilities live in the distant past and
> are creating quite unnecessary problems for accountants who live in a
> rapidly changing business environment.
>
> If you want to hear more, please let me know. I can provide you with more
> details, probably not readily available in Finland.

Yes, I would be very interested in learning more. It appears to go
right to the very fundamentals of accounting. As you will have seen,
the Finnish expenditure-Revenue accounting takes very strongly the
income-statement postition. Furthermore, it is interesting also
because we have had a different kind of paradigm war in Finland back
in the 1970's and early 1980's. It was about on the other hand on
what constitutes the scientific approach in accounting and on the
other hand what subjects are acceptable accounting subjects.
Fortunately, we currently are much, even though not always
compelety, over it.

> Ference Eisner
> ference eisner 9 clarice way wallington surrey england sm6 9ld

   All the best, Timo

....................................................................
Prof. Timo Salmi   Co-moderator of news:comp.archives.msdos.announce
Moderating at ftp:// & http://garbo.uwasa.fi archives  193.166.120.5
Department of Accounting and Business Finance  ; University of Vaasa
ts@uwasa.fi http://uwasa.fi/~ts BBS 961-3170972; FIN-65101,  Finland



