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In this paper the long memory and non-linear properties of share prices in the UK's Stock Exchange and AIM are explored. The results suggest that the most commonly traded shares exhibit long memory thus raising interesting issues about the validity of normal assumptions of market efficiencies.

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Financial ratios have been used for almost a century now and although there are misgivings about how they perform as an analytical tool, they have generally stood the test of time. A major problem concerns which ratios should be adopted in order to carry out a multivariate evaluation. The purpose of this paper is to show how factor analysis may be utilised in the selection of ratios for financial evaluation. Additionally the importance of cash flow based ratios is examined in the light of Financial Reporting Standard 1. The results of the study indicate that factor analysis can be used to reduce the number of variables under consideration for evaluative purposes with minimum loss of explanatory power. Also, cashflow, and in particular Operating Cash Flow, is found to be a significant factor for evaluative purposes, clearly separable from Entity Cash Flow, Funds Flow and liquidity-based factors.