Date of Award

Spring 5-2020

Document Type

Honors Thesis

Degree Name

Bachelor of Science



Advisor/Committee Chair

Raymond K. Van Ness, Ph.D.

Committee Member

Mark E. Hughes, CPA, Ph.D


Knowledge of the relationship between the financial performance of firms within the U.S. defense industry and the defense spending decisions by the United States Government is an important domain of research. Greater understanding can enable investors, communities, and employees to make more informed decisions about investments and/or career choices. In this work, I examined the financial statements of five major American defense contractors from 1993-1995, 2003-2005, and 2011-2013. Financial performance of these firms was then correlated with spending actions by the United States Defense Department. Although the financial sensitivity of these firms on spending decisions by the United States Defense Department is expected, the extreme sensitivity that was discovered suggests these firms could benefit by integrating diversification strategies into environments offering counter cyclical opportunities for revenue and profitability.