Prevailing economic models of credit risk assume that price fluctuations form a bell-shaped curve, with very large fluctuations essentially never occurring. But during finan- cial crises, wild fluctuations occur more frequently than these models predict. Boris Podobnik et al. (pp. 17883-17888) developed a method to incorporate these fluctuations in their analysis of financial data from 488 publicly traded manufacturing firms for each quarter from 2000-2009. The researchers used multiple types of known calculations to analyze financial data such as the ratio of working capital to total assets, and sales divided by total assets.
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