Red Flags in Prospective Contractor's Financial Statement

Abstract

This thesis attempts to identify warning signals in the contractors financial statement, or 'red flags', which may be used to identify those prospective contractors who are likely to become delinquent in the performance of their contracts. A 'red flags' list compiled from the current literature was sent to financial analysts in the thirty-eight Financial Service Branches, Defense Contract Management Command Area Offices(FSDCMAOs) to determine the 'red flags' most widely used. Additional issues are examined. The first is whether geographical location and length of field experience of the reviewing analyst might influence the choice of 'red flags'. Secondly, are different approaches used in conducting financial statement analysis of a manufacturer versus a vendor? The study identifies ten 'red flags' used by more than half of the responding analysts and there appears to be no difference in 'red flags' used based on geographical location of the analysts or as a consequence of their length of field experience.... Financial analysis, Financial statement.

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Document Details

Document Type
Technical Report
Publication Date
Dec 01, 1989
Accession Number
ADA261180

Entities

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  • Man-ying Lee

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  • Naval Postgraduate School

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  • Biomedical

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  • California
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  • Statistical Analysis
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