After the post-2008 global financial crisis, people are much more interested in
knowing more about human capital as a key indicator of future value in firms,
which incorporates management quality and leadership. Investors increasingly
need to see early warning signs of failure or growth prospects in their
investments. For bankers, lending proposals are either accepted or rejected on
the basis of set financial ratios, such as debt to equity and loan to
valuation. Yet, do these ratios tell the real story of the value which is being
created, or destroyed, within a company? Is it dangerous for investors to rely
on quantitative measures alone?
As part of an ongoing research study, it has been found that financial
information and traditional quantitative analytical tools have not served
investors at all well. The focus is changing from a reliance on "lag"
indicators of past financial performance, more towards a focus on more
contemporary qualitative "lead" indicators.
A full executive summary of the research is now available for you to read
below. Do you think that it's dangerous for investors to rely on quantitative