Financial and stock market variables as predictors of management buyouts

Article Abstract:

The financial characteristics of formerly public firms are analyzed for the year immediately preceding going private. Seven ratios are used in developing a discriminant function: ownership concentration, net worth to cash flow, cash flow to complete assets, earnings-price ratio, book-price value ratio, book worth of depreciable assets in relation to original costs, and yield of dividend. Financial qualities alone may provide a mechanism through which companies going private through management buyouts can be distinguished from others. It is argued that financial characteristics are either explicit decision variables or reflect non-financial reasons for management buyouts, regardless of stated reasons for going private.

Management buyouts, Leveraged buyouts

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The persistence of abnormal returns

Article Abstract:

The lack of persistence of abnormal profits is a central element of competitive markets. This characteristic is analyzed by examining the time-series behavior of return on investment (ROI). The aggregate dynamic process of ROI is first analyzed, and then the influence of strategic and market factors on the ROI process is examined. The behavior of ROI is approximated by a mean reverting time-series process. Several factors influence the persistence of return. These factors can result in longer-term abnormal profits by insulating a firm from competitive forces. Market forces will generally drive return back to its competitive rate, however.

Research, Profit, Profits, Return on investment, Rate of return

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Impact of racial diversity on intermediate and long-term performance: the moderating role of environmental context

Article Abstract:

There is evidence of a U-shaped relationship between racial diversity and productivity which is more robust in service-oriented compared to manufacturing-oriented industries. A positive linear relationship between diversity and performance is proposed for longer-term profitability.

United States, Economic aspects, Influence, Workplace multiculturalism, Workplace diversity, Report

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