Changes in Profit Margin (EBITDA/Sales) Surrounding Focus List Release
This table reports levels and changes in the mean and median levels of EBITDA/Sales (the profit margin) for companies that appeared on Council of Institutional Investors focus lists between 1991 and 1994. EBITDA/Sales is also reported for comparison portfolios of firms matched on 2-digit SIC and on membership in the S&P 500 index. Year zero is the fiscal year in which a firm is first reported on a focus list. Accounting information in year +3 was unavailable for all firms that appeared on the 1994 focus list and was incomplete in year +3 for some firms on the 1993 focus list. On average, the industry matched and S&P samples contain 2,825 and 1,625 firm-years of data, respectively. The second panel shows first differences in profit margin between periods. Tests of statistical significance of inter-sample differences as well as within sample changes from year zero levels are noted at the 1%, 5% and 10% levels as a, b, and c respectively. These tests are computed using a Wilcoxon statistic when comparing medians and a t-statistics when comparing means.
| Raw levels | Industry-adjusted | S&P 500-adjusted | |||||
| Year | N | Mean | Median | Mean | Median | Mean | Median |
| -3 | 107 | 14.5% | 13.6% | 4.4%a | 2.7%a | -4.3%a | -2.5%a |
| -2 | 108 | 13.4% | 11.4% | 3.5%a | 2.6%a | -5.4%a | -4.7%a |
| -1 | 107 | 13.0% | 11.0% | 2.7%b | 2.0%b | -6.1%a | -5.3%a |
| 0 | 107 | 12.1% | 10.9% | 1.4% | 0.6% | -7.6%a | -5.8%a |
| +1 | 102 | 12.6% | 11.7% | 1.5% | 1.6%b | -7.8%a | -5.9%a |
| +2 | 96 | 15.2% | 13.3% | 4.1%a | 2.3%a | -5.6%a | -4.7%a |
| +3 | 82 | 15.8% | 14.5% | 4.4%a | 3.3%a | -5.1%a | -3.9%a |
Year to Year Changes
| (0,+1) | 107 | 0.3% | 0.7%a | -0.2% | 0.3% | -0.4% | 0.2% |
| (0,+2) | 92 | 2.7%a | 1.6%a | 1.8%c | 0.8%b | 1.5%b | 0.8%c |
| (0,+3) | 82 | 2.7%a | 2.1%a | 3.5%a | 1.4%a | 0.7% | 0.9%c |
