ABSTRACT
This chapter discusses the contribution of management buy-outs to the restructuring and regeneration of British industry. Financial performance considered in terms of profitability and sales growth, liquidity and an appropriate long-term financial structure. Poor performance in the market place has a direct effect on profitability and sales growth. The chapter addresses three main economic performance factors, employment, markets and investment. The factors affecting profits are generally fairly evenly spread between the sources of buy-outs. The most apparent difference is that buy-outs from receivership have benefited by growth in their markets, whilst buy-outs from the other two sources have been just as likely to experience market decline. The finance coverage ratio provides a measure of a company's ability to service its capital structure. The companies in the 1980 cohort show a reduced ability on average to service their financing between the first and second year of operating.
