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Using financial ratios to differentiate domestic and multinational corporations

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  • Carl B. McGowan

Abstract

The objective of this empirical study is to determine if multinational corporations have statistically different financial characteristics that can be used to differentiate the multinational corporations from domestic corporations. We find that multinational corporations have higher levels for net profit margin, total asset turnover and leverage. However, the retention rates for the two groups are not statistically significantly different.

Suggested Citation

  • Carl B. McGowan, 2007. "Using financial ratios to differentiate domestic and multinational corporations," Applied Financial Economics, Taylor & Francis Journals, vol. 17(13), pages 1071-1074.
    • Handle: RePEc:taf:apfiec:v:17:y:2007:i:13:p:1071-1074
    DOI: 10.1080/09603100600749287
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    1. Errunza, Vihang R & Senbet, Lemma W, 1981. "The Effects of International Operations on the Market Value of the Firm: Theory and Evidence," Journal of Finance, American Finance Association, vol. 36(2), pages 401-417, May.
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    4. Ball, R & Brown, P, 1969. "Portfolio Theory And Accounting," Journal of Accounting Research, Wiley Blackwell, vol. 7(2), pages 300-323.
    5. Alan M Rugman, 1976. "Risk Reduction by International Diversification," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 7(2), pages 75-80, June.
    6. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
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    Cited by:

    1. Stuart McLeay & Maxwell Stevenson, 2009. "Modelling the longitudinal properties of financial ratios," Applied Financial Economics, Taylor & Francis Journals, vol. 19(4), pages 305-318.

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