Corporate USA: Trending Downwards

Abstract

Purpose – This paper develops a discussion looking at the financial performance trends of Corporate USA. Design/methodology/approach – The United States of America, the data collected is from public listed corporations from 2000–2012* (Estimates based on a 3 year rolling average) for the development of multivariate regression models for parametric data. These developed models are constructed to test relationships between dependent and independent variables in line with research questions and hypotheses.Findings – The findings found that there is a high correlation using the adjusted R2 measure between EBIT and NPAT and Share Prices as DV’s and Market Capitalisation as IV’s, all as at 30/6 from 2000–2011 actuals and 2012*(Estimates based on a 3 year rolling average). The preliminary findings seem to suggest that between 2000–2005, although share prices in the US were high, that issued capital was lower, resulting in lower Market Caps, shows a lower EBIT and NPAT. Between 2005–2006, that share prices, share issues and Market Caps in the US tended to peak, show a higher EBIT and NPAT. From 2007-2008 on wards consistent with the times, although share issues are at an all time high, share prices have dramatically slumped over this period, resulting in much lower Market Caps, show lower EBIT and NPAT. There would seem to be a near perfect correlation between DV's and IV's, and in particular a near perfect correlation between MCAPS and PROFITABILITY which is being studied further in greater detail.Originality/value – The paper will be of vital importance to other academics looking at this question, and to both public and private sector entities.