A group of researchers has relied on statistical techniques to tease the relevant informationout. Delen, Kuzey, & Uyar (2013) first used factor analysis to identify underlying dimensionsof the ratios, followed by predictive modeling methods to determine relationships between firmperformance and financial ratios. The authors found that the earnings before tax to equity ratio andnet profit margin were the two most important variables in predicting future performance. Chenand Shimerda (1981) employed principal component analysis to 34 financial ratios that were usefulin various studies on prediction of bankruptcy and found that all ratios were highly correlated toseven major factors. That is, many ratios revealed the same information. Such findings indicatethat there is an opportunity to reduce the number of ratios employed to a much more limited butstill representative set