Financial health indicators: an analysis of financial statement information to determine the financial health of DoD contractors
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Authors
Grant, Timothy J.
Ingram, Tony L.
Deas, Darnell D.
Subjects
financial health
procurement fraud
determinants
financial ratios
Z-score
profitability
procurement fraud
determinants
financial ratios
Z-score
profitability
Advisors
Rendon, Juanita M.
Landry, Steven P.
Date of Issue
2016-12
Date
Publisher
Monterey, CA; Naval Postgraduate School
Language
Abstract
Prior to awarding a contract, government contracting officers must be able to determine the financial health of prospective contractors. In fact, according to the Federal Acquisition Regulation (FAR) 9.104- 1(a), the very first general requirement to being considered a responsible prospective contractor is to show adequate financial resources to perform the contract or the ability to obtain financing. The purpose of this research is to identify a financial assessment framework that could assist DOD contracting officers with determining the financial health of potential DOD contractors. This research study may help DOD contracting officers determine the financial health of potential contractors prior to awarding a contract. The findings of this study provide a recommended framework that a contracting officer could follow in order to assess the financial health of a prospective contractor. The framework includes a ratio analysis using selected ratios compiled by this study, as well as a comparative analysis using industry average driven data. The framework also incorporates horizontal and vertical analyses, as well as bankruptcy and fraud analyses. The financial assessment framework created in this study is a comprehensive financial health assessment tool that can be utilized by DOD contracting officers.
Type
Thesis
Description
MBA Professional Report
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Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.