The primary dimensions of financial condition for firms within the defense industry

Abstract

This thesis examines the primary dimensions of financial condition for firms within the defense industry. Specifically, the thesis conducts a factor analysis of thirty-two financial ratios for 50 defense firms over a ten year period from 1983 through 1992 to identify the primary dimension of fmancial condition in the industry. Furthermore, the thesis examines whether these dimensions are represented by a specific subset of fmancial ratios and whether these primary dimensions and representative ratios are stable across time. The thesis concludes that there are nine primary dimensions of fmancial condition for firms within the defense industry. These dimensions are essentially stable across time. Furthermore, the subset of individual ratios which best describe the dimensions are also stable across time.