A Linear Regression-based Analysis of the Value of U.S. Construction Firms

Abstract

The construction industry has faced a block in its development in recent years, and the need to enhance the value of construction industry enterprises is imminent. The U.S. construction market is one of the most prosperous markets in the world, so the study of enhancing the value of firms within the U.S. construction industry holds considerable importance. Many previous studies have focused only on qualitative factors, which has some limitations. Therefore, this study investigates how to enhance the market value of U.S. firms from the perspective of financial factors. This study uses regression analysis to select the financial data of 34 U.S. companies listed in the construction industry. Then the relationship between their EV/EBITDA, net profit margin, and gross profit margin is modeled, and four sets of linear regression equation models are established, revealing that net profit margin, gross profit margin, and enterprise value have a significant positive relationship.