A Study of the Effect of Economic and Inflation Related Factors Upon Business Firms Acting as Suppliers to the United States Air Force.

摘要

Using publicly available information such as COMPUSTAT, Annual Financial Reports, and SEC 10K's, this study identifies all or most of the firms in the defense aerospace industry, distinguishes between government contracting (primary) and civilian contracting (control) firms, and classifies products by SIC class for each category. Employing these product/firm categories, the study then compares defense versus non-defense producers on the basis of their effectiveness on five financial/managerial/economic areas: (1) product specialization, (2) inflation, (3) production, (4) liquidity/working capital management and (5) profitability. Up to twenty year comparisons were made in those instances where relaiblle data were available on a consistent basis. The conclusions which follow are extremely general and convey only broadly what the study is about. With respect to product specialization, primary contractors had a higher order backlog to sales ratio and a lower raw material inventory to sales ratio. With respect to inflation, primary contractors were better protected against cash flow problems then were their civilian counterparts, government payment methods tending to stabilize cash flows.