A Multivariate Study of Firm Performance and the Use of Modern Analytical Tools and Financial Techniques

A survey of the Fortune 500 firms reveals that major domestic corporations are selective yet progressive adoptors of formal analytical procedures and hold positive perceptions regarding the role of microcomputers in the corporate decision-making process. We used logistic regression and multiple discriminate models to predict a firm's performance relative to that of its primary industry. Three analytical techniques (financial leverage, inventory management, and internal rate-of-return) plus widespread encouragement of the use of personal computers positively influence firm performance.