EXAMPLE 7.15 How Different Are Cash Flow Margins?

CASE 7.2 The difference in mean cash flow margins for active versus failed firms is

For a 95% margin of error, we will use the critical value from the distribution. The margin of error is

We report that the active firms have current cash flow margins that average 12.56% higher than failed firms, with margin of error 8.74% for 95% confidence. Alternatively, we are 95% confident that the difference is between 3.82% and 21.30%.