Competitive Landscape: Financial Ratios
Financial ratios can be categorized as follows:
Further help is available from CreditGuru.com and the CCH Business Owner's Toolkit.
[http://www.creditguru.com/ratios/ratiopg1.htm] and [http://www.toolkit.cch.com/text/P06_7100.asp]
- Liquidity Ratios
- Often called working capital ratios, these include the Current Ratio, the Quick Ratio, and the Debt To Equity Ratio.
- Efficiency Ratios
- The common ones include Inventory (or Asset) Turnover Ratio, Accounts Payable To Sales Ratio, and Accounts Payables To Sales Ratio.
- Profitability Ratios
- The profit margin is also known as the Return On Sales; net worth is often called Return On Equity; there's also Return On Assets.
- Solvency Ratios
- The focus here is financial risk ratios: Debt To Equity, Debt To Assets.
Single Industry Sources
Many professional and trade associations publish financial ratios and statistical information on their industry in annual reports or special issues of trade journals. Some of these titles may be identified by searching IRIS, our online catalog, by SUBJECT, using the industry name, for example, Grocery Trade, or Automobile Industry and Trade. For special issues of journals, please consult the Guide to Special Issues and Indexes of Periodicals. (CAMDN, LSM REF HF 5351 .G85; DANA, KLMR Reference Desk)
These three are the standard sources for industry ratios:
Other useful sources include:
- Troy's Almanac of Business and Industrial Financial Ratios. (DANA, KLMR REF HF 5681 .R25 T68) Ratios, grouped by asset size, are listed for industries and product lines, by SIC number. Analysis based on corporate filings with the Internal Revenue Service.
- Dun & Bradstreet's Industry Norms and Key Business Ratios. (CAMDN, KLMR REF HF 5681 .R25 I525; DANA Reference Desk) Provides three years of key ratios (at median, upper, and lower quartiles) for about 800 industries arranged by SIC number.
- RMA Annual Statement Studies from the Risk Management Association. (CAMDN, KLMR REF HF 5681 .B2 R6; DANA Reference Desk) Gives current and historical ratios for more than 600 manufacturing, wholesale, retail, and selected service industries, by SIC code. Includes a bibliography of ratio sources for particular industries. Individual industry reports available online for a fee from the Risk Management Association. [http://www.rmahq.org/Online_Prods/asstOL.html]
Ka-Neng Au, 29 Jan 2002
- Financial Studies of the Small Business. (DANA REF HD 2346 .U5 F55A) Gives ninteen ratios for small businesses with assets under $250,000. Arranged in groups by asset size and business category.
- QFR: Quarterly Financial Report for Manufacturing, Mining and Trade Corporations. (ALEX U.S. DOCS; DANA Periodicals), also accessible
online at the U.S. Census Bureau. Presents estimated statements of income and retained earnings, balance sheets, and related financial and operating ratios, for corporations with at least $5 million in assets. [http://www.census.gov/csd/qfr/]
- Standard & Poor's Analyst's Handbook: Composite Corporate Per Share Data by Industries. (DANA REF HG 4519 .S882) Provides selected income statement items and ratios in relation to S&P stock price indexes. Up to thirty years of annual data are given for each industry.
- Strategic Advantage offers
Benchmarks for Your Business, which are selected industry ratios (including ROE) for about 540 industries, identified by SIC code. You need to identify youself and provide your company name, but any name will do. [http://www.strategy4u.com/framed_sic.html]
- The number of establishments in each industry may be found in County Business Patterns (ALEX U.S. DOCS; DANA Reference Desk), also accessible
online at the U.S. Census Bureau. The figures are broken down by company size, as measured by number of employees. [http://www.census.gov/epcd/cbp/view/cbpview.html]