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Q: Database of how long do corporations exist ( Answered,   2 Comments )
Question  
Subject: Database of how long do corporations exist
Category: Business and Money > Economics
Asked by: pacoid-ga
List Price: $50.00
Posted: 17 May 2002 14:07 PDT
Expires: 17 May 2003 14:07 PDT
Question ID: 16791
Where can I find a database about the expected "lifetime" of a
corporation?  I.e., vital statistics on a national or international
level of large firms going out of business, correlated with how long
they'd been in business.  I need enough solid, reliable data to run
some statistical analysis, preferrably reaching back into a reasonably
long history (19th century).

Request for Question Clarification by calebu2-ga on 17 May 2002 15:03 PDT
I would suggest CRSP (Center for Research in Security Prices) from
which you can get pricing information as well inception dates and
death dates for all companies publicly traded on the NYSE/Nasdaq/AMEX.
Their data runs from 1925-2001 and is available (at a cost) from :

http://gsbwww.uchicago.edu/research/crsp/

You may also be interested in financial statements from COMPUSTAT
available through :

http://www.compustat.com/

Their data covers the period 1950-present.

Unfortunately, my access to these databases does not allow me to make
money from consulting. However I would be interested to know if this
is likely to cover the scope of the data that you are requesting.

Clarification of Question by pacoid-ga on 20 May 2002 15:03 PDT
The database offerings at CSRP and Compustat look as if they would
provide the kind of data sets that I've been seeking.  Might be
overkill to an extent: either of those organizations list a $1000
minimum fee for accessing their databases.  If that's the most
cost-effective option available, then I'll use it.  Thank you very
much.
Answer  
Subject: Re: Database of how long do corporations exist
Answered By: remoran-ga on 25 May 2002 17:21 PDT
 
This is my first shot at something I thought would not be a real
difficult assignment but now I see why it's worth $50.00

I did not see any freebies concerning average corporate lifetime but
"McKinsey & Company estimates that by the end of the year 2020 the
average lifetime of a corporation on the S&P will have been shortened
to about 10 years." http://www.mckinsey.com/knowledge/articles/MJ_jack_welch_cd.asp

To generate data, www.bizstats.com has a wealth of statical
information on US businesses of all sizes with industry sector,
profits, debt to equity ratio etc. etc. This would give you the raw
data to build a database on. It's pretty amazing.

As for analysis on this data, the Z-Score business failure predictor
has gained widespread acceptance. One site that shows how this works
is http://www.css.edu/USERS/dswenson/web/Z-SCORE.HTM. Another is
http://www.creditworthy.com/topics/zscore.html frm which this
following quote comes from. "This There have been many other
bankruptcy predictors developed and published. However, .none has been
so thoroughly tested and broadly accepted as the Altman Z-Score. The
Altman Z-Score variables influencing the financial strength of a firm
are:

CA = CURRENT ASSETS
TA = TOTAL ASSETS
SL = NET SALES
IN = INTEREST
TL = TOTAL LIABILITY
CL = CURRENT LIABILITIES
VE = MARKET VALUE OF EQUITY
ET = EARNINGS BEFORE TAXES
RE= RETAINED EARNINGS "

Another site that allows you to plug in info is
http://www.creditguru.com/CalcAltZ.shtml This is pretty cool and it
too is free. HTH

Bob
Comments  
Subject: Re: Database of how long do corporations exist
From: nutshell-ga on 20 May 2002 13:54 PDT
 
Pacoid-ga:

You may find this artile intresting and useful:

http://www.mckinsey.com/knowledge/articles/MJ_jack_welch_cd.asp

nutshell-ga
Subject: Re: Database of how long do corporations exist
From: pacoid-ga on 20 May 2002 15:05 PDT
 
Very nice.  The estimator from McKinsey was tracking at 65 years (for
lifetime on SP500) and is projected to drop to a decade or so.... 
That hits close to my query, but one would need to have a sample
population to develop a PDF for expected lifetime.  Thank you!

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