Abstract
As a result of computer usage for problem examination, many theories and developed formulas used in financial analysis are being scrutinized. The object of some assessments has been to test the validity of generally practiced methods which are used for estimating the future earning power of companies. The ultimate goal is the selection of only those useable methods or develop exceptions to methods which will create the highest level of credibility for forecasting the future. The development of new evaluation techniques may also occur as an aside in the process. | The evalution process, beyond examining results, has stimulated questions relating to some of the definition of terms used in financial analysis. One such term is stability as it is related to rates of return on stockholder's equity. The purpose of this paper is to statistically test for characteristics of stability in rates of return as an effort to remove some apparent transparency associated with it. | Hopefully, knowledge gained from this study may be used to increase the understanding of financial methodology which requires stable rates as essential components for credible results.