기업전략과 미래수익성에 관한 연구

초록

One technique of financial statement analysis is to decompose return on assets into asset turnover and profit margin on sales. Asset turnover measures the firm’s ability to generate revenues from its assets while profit margin measures the firm’s ability to control the costs incurred to generate the revenues. The asset turnover and profit margin may be affected by the firm’s strategy. Generally, firms with cost leadership strategy show high asset turnovers and low profit margins while firms with product differentiation strategy show low asset turnovers and high profit margins. Prior research(Lev(1969), Nissim and Penman(2001)) finds that financial ratios are mean reverting. Mean reversion of financial ratios means that firms' financial ratios higher than average ratios of industry or all firms tend to decrease toward the averages and those with lower than averages tend to increase toward the averages. This paper examines whether asset turnover and profit margin ratios with different strategies show mean reverting patterns and analyzes how mean reverting patterns affect firms’ future profitability. The sample consists of all manufacturing firms with December 31 fiscal year end, during 1981 to 2008. Empirical results show that both asset turnover and profit margin tend to be mean reverting. Firms with product differentiation strategy show decreasing profit margins and increasing asset turnovers, and cost leadership firms show increasing profit margins decreasing asset turnovers. The results also show that increases in profit margins for cost leadership firms are more negatively related to future profitability improvements than for product differentiation firms, indicating that usually profit margins are improved through operating expense cuts which have only temporary effects on future profitability. The effects of increases in asset turnovers on future profitability for cost leadership firms are less than those for product differentiation firms, indicating that cost leadership firms utilize their assets efficiently and additional improvements of asset turnovers have less persistent effects on future profitability, but product differentiation firms utilize their assets inefficiently and increases in asset turnovers have permanent impacts on future profitability. The results of this study may be helpful for financial analysts and others to predict financial ratio and firms’ value.

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