Financial Ratio Benchmarks for Defense Industry Contractors

Abstract

The purpose of this study was to develop and analyze financial ratio benchmarks of the aerospace defense contracting industry. The study addressed four questions: (1) How should the aerospace defense industry be specifically defined? (2) Which financial ratio benchmarks should be provided? What information does a specific ratio provide? (3) How are specific ratio benchmarks calculated and tested for statistical significance? (4) What problems result from financial ratio analysis? Review of the literature disclosed the capability of defining a specific industry using the Standard Industry Classification System. An industry can be further restricted by only including companies that have recently contracted with the Department of Defense. Based on these restrictions the Compustat data bank was used to access sample data. From an extensive list of ratios, 14 were selected from 7 main categories: (1) Cash Position, (2) Liquidity, (3) Working Capital/Cash Flow, (4) Capital Structure, (5) Debt Service Coverage, (6) Profitability, and (7) Turnover. Theses. (rrh)

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1989
Accession Number
ADA216359

Entities

People

  • Doreen C. Province

Organizations

  • Air Force Institute of Technology

Tags

Communities of Interest

  • Biomedical
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Aerospace Industry
  • Air Force
  • Contracts
  • Data Analysis
  • Data Mining
  • Data Science
  • Defense Industry
  • Department Of Defense
  • Information Science
  • Knowledge Management
  • Money
  • Plastic Explosives
  • Regression Analysis
  • Standards
  • Statistical Analysis
  • Statistics
  • Surveys

Fields of Study

  • Business

Readers

  • Computational Modeling and Simulation
  • Defense Financial Management and Audit.
  • Industrial Economics

Technology Areas

  • Space