Assets-to-liabilities ratios of healthy companies
Lower quartile from 68 companies = 1.217
Normal approximation
Simulation
Use this page to explain how a simulation can give the approximate standard error for an estimator when no formula is available.
In this case, we are estimating a lower quartile and samples are simulated from a normal distribution that is probably close to the population distn. The lower quartile for this normal distribution is 1.295, so we can find the estimation error from any sample and build up the error distribution.
Click Accumulate then take 100 or more samples to build the error distribution (hold down the Take sample button). Then click Estimate s.e. and bias.
From the simulation, the error in our estimate of the population lower quartile, 1.217, is likely to be less than 0.2 and will almost certainly be less than 0.3.
Researchers in Greece found the assets-to-liabilities ratios of a sample of 68 healthy companies. Low assets-to-liabilities ratios are usually regarded as undesirable for a company.