Table 1 presents the descriptive statistics of
the financial characteristics of the sample firms.
Descriptive statistics are presented for the full
sample as well as high BM firms. The means for
most financials are greater than the medians,
indicating the presence of some very large values.
High BM firms are relatively smaller in size and
generate relatively lower sales, operating income
and cash flows from operating activities. Consistent
with Fama and French (1995) and Piotroski (2000),
high BM firms earn relatively lower ROA. This may
partly be due to the fact that high BM portfolio
consists of a vast majority of poor performing firms.
Table 1 also presents the descriptive statistics of
stock returns. Consistent with Lakonishok et al.
(1994), stock returns of high BM firms are relatively
more positive.