Date of Conferral
Doctor of Business Administration (D.B.A.)
More than 50% of small businesses fail by the 5th year of operation because of lack of economic sustainability. Organizations without a chief financial officer (CFO) with financial expertise may have suboptimal fiscal performance. The purpose of this correlational study was to examine whether there was a relationship between CFO licensure status, CFO age, and firm earnings per share. A sample of 403 small businesses in the United States, taken from the Russell 2000 Index, was used in the study. The theoretical framework for the study was Penrose's resource-based view of the firm. CFO names and firm earnings per share were taken from the 2015 SEC 10-K filings. CPAverify was used to determine specific CFO licensure status. LexisNexis was used to identify CFO age. Multiple linear regression was used to examine the relationship between CFO licensure status, CFO age, and firm earnings per share. A multiple regression model with F(2, 400) = 3.69, p = .03, R2 = .018 demonstrated a relationship between CFO licensure status, CFO age, and firm earnings per share ratio. Having a CPA license F(1, 154) = 8.59, p = .01, R2 = .053 revealed a slightly better correlation between licensure status and firm earnings per share. CFO age F(1, 401) = 3.10, p = .08, R2 = .005 revealed no relationship to firm earnings per share. Small business leaders could use this study's findings as the basis for hiring CFOs with financial expertise. Doing so may help increase the firm's profitability and mitigate the risks of business failure. Positive social change may ensue provided small businesses use this study's findings to improve job retention and the economic viability of a community.