APPROACHES TO DETERMINATION OF TIME SERIES FOR CALCULATION OF NORMS OF FINANCIAL RATIOS AND THEIR APPLICATION IN LATVIA

• Authors: Evgenii Sergeev , Aina Chaplinska

Abstracts

EN

Important question is determination of time series for calculation of norms of financial ratios. This question in modern economic literature is almost not analysed and not solved. And therefore the purposes of this article are development of approaches to determination of time series for calculation of norms of financial ratios and practical application of these approaches in Latvia. Gross domestic product (GDP) influences the development of dynamic row of financial ratios necessary for calculation of sectors’ normative value. The more indicators will be included into the dynamic row during years of GDP fall, the lower usually are the final normative sector values. In 2008-2010, in Latvia GDP fall was observed that is why for calculation of norms, it would be incorrect to form dynamic rows with prevalence of indicators of these years. Approaches to determination of time series developed by the authors are suggested for calculation of norms of financial ratios: by the arithmetic average value of the moving average of GDP growth, by the percent of years of GDP downfall and by the median value of GDP growth. Schemes, the description of stages of these approaches are submitted, and also practical application of approaches is given. For understanding of approaches the term “expanded times series under analysis” is entered. Definition of the term is given: “expanded times series under analysis is the time series, which has typical equal economical conditions of national economy development in a long-term, usually, in recent years”. Common privileges of these approaches are: simplicity of calculation, the accuracy of the norms due to the proximity to the dynamics of the expanded time series, economy of financial costs of carrying out research, economy of time expenditure on carrying out research, taking into account the dynamics of recent years. It is better to apply these approaches in a complex with the aim to determine the time series for calculation of norms of financial ratios correctly by a resulting effect of the majority of the approaches. Destination of these approaches is to help researchers in development of norms of financial ratios.

Keywords

EN

approach; determination; time series; calculation; norm; ratio; gross domestic product

• Publisher: Daugavpils University, Institute of Humanities and Social Sciences
• Journal: Sociālo Zinātņu Vēstnesis
• Year: 2017
• Issue: 1
• Pages: 47-58

Contributors

author

Evgenii Sergeev

author

Aina Chaplinska

Identifiers

ISSN

1691-1881