A characterization of the financial condition of the United States' aerospace-defense industrial base

Abstract

Over the past several years, the United States' Department of Defense acquisition environment has changed considerably as new policies and procedures have been enacted, budgets reduced, military hardware requirements changed, etc. Using data envelopment analysis, this study assesses the financial condition of the aerospace-defense industrial base from 1978 to 1992 in comparison to the Standard & Poors (S&P) 500. The results of this research indicate that the S&P 500 firms were in better financial condition relative to defense firms over the entire 15-year period of the study. Furthermore, the financial condition of aerospace-defense firms has not deteriorated relative to S&P 500 firms.data envelopment analysis defense-industry studies financial performance analysis