Changes in Capital Spending and Debt/Assets Surrounding Focus List Release
This table reports the mean and median levels of (book) leverage for the Council of Institutional Investors focus list firm portfolio during the period 1991-1994. The raw levels of the net cash from acquisitions are reported as well as industry-adjusted (2-digit SIC) and S & P 500–adjusted levels (excluding CII sample firms). Leverage is defined as ending period long term debt divided by beginning period total assets ((Item 9 + Item 34)t/Item 6)t-1). On average, the industry matched and S & P samples contain 2,825 and 1,625 observations respectively. Inter-sample differences as well as within sample changes from year 0 levels are noted at the 1%, 5% and 10% levels as a, b, and c respectively.
Panel A. Debt/Assets Ratio
| Raw levels | Industry-adjusted | S&P 500-adjusted | |||||
| Year | N | Mean | Median | Mean | Median | Mean | Median |
| -3 | 107 | 34.7% | 30.9% | 0.4% | -2.5% | 3.9% | -6.9%b |
| -2 | 110 | 32.8% | 30.5% | -0.6% | -1.8% | 2.7% | 4.3%b |
| -1 | 108 | 30.9% | 31.2% | 1.0% | 1.4% | 1.8% | 5.5%a |
| 0 | 107 | 31.0% | 30.3% | 1.0% | 1.9% | 2.8% | 5.3%a |
| +1 | 103 | 29.7% | 28.0% | -4.2% | 0.1% | 1.5% | 2.6%c |
| +2 | 99 | 28.5% | 26.3% | -11.9%a | -4.8%a | 0.1% | 1.1% |
| +3 | 82 | 30.3% | 26.0% | -13.6%b | -3.4%b | 2.0% | 0.8% |
| (0,+1) | 107 | -2.0%c | -2.0%a | -6.2%b | -2.3%a | -3.2%b | -1.7%c |
| (0,+2) | 99 | -2.9%b | -2.4%b | -13.0%a | -5.5%a | -3.0%b | -2.7% |
| (0,+3) | 82 | -14.5% | -3.1%b | -17.5%a | -5.6%a | -15.3% | -3.3% |
Panel B. Capital Expenditures/Assets
| Raw levels | Industry-adjusted | S&P 500-adjusted | |||||
| Year | N | Mean | Median | Mean | Median | Mean | Median |
| -3 | 107 | 8.1% | 7.1% | -0.6% | -0.8% | -0.6% | -0.3% |
| -2 | 110 | 7.1% | 6.5% | -1.1%c | -0.8%c | -1.2%b | -0.4%c |
| -1 | 108 | 5.7% | 5.4% | -1.1%b | -1.6%a | 1.5%a | -1.2%b |
| 0 | 107 | 6.0% | 5.3% | -2.1%a | -2.2%a | -1.6%a | -1.0%a |
| +1 | 103 | 5.5% | 5.3% | -4.0%a | -2.3%a | -2.2%a | -1.0%a |
| +2 | 99 | 5.4% | 5.1% | -4.1%a | -3.3%a | -2.4%a | -1.3%a |
| +3 | 82 | 5.9% | 5.5% | -5.5%a | -2.7%a | -2.0%a | -0.8%b |
| (0,+1) | 107 | -0.6%c | -0.1% | -1.5% | -0.1% | -0.9%b | -0.1% |
| (0,+2) | 99 | -0.6% | 0.0% | -1.8%a | -0.6%b | -0.8%c | -0.1% |
| (0,+3) | 82 | -0.5% | 0.0% | -3.8%b | -0.4% | -1.0%c | 0.0% |
