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Company and Industry Research: Industry ratios

Finding Industry Ratios

Where to Find Industry Ratios in the Library's Online Databases

Dun & Bradstreet Key Business Ratios Online edition  
D&B’s KBR database provides three years’ worth of Upper, Median, & Lower statistics by SIC code followed by a “Median Variance” of these ratios in comparison with the other two years’ median statistics.
  Drawback – you must know the SIC code for the industry under consideration.  Only 800 SIC codes are featured, so not every industry is profiled.

Industry Ratios found in D&B’s KBR Online Edition:  Quick Ratio, Current Ratio, Current Liabilities/Net Worth, Current Liabilities/Inventory, Total Liabilities/Net Worth, Fixed Assets/Net Worth, Collection Period, Sales/Inventory, Assets/Sales, Sales/Net Working Capital, Accounts Payable/Sales, Return on Sales, Return on Assets, Return on Net Worth.

eStatement Studies (Risk Management Assn.) online edition 
For access please contact ewierzbicki@roosevelt.edu, a username and password has to be generated for all current students and faculty interested in accessing this database.  RMA's Annual eStatement Studies provides many industry ratios derived from its Annual Tax Return Statements data.  To find your ratios, either choose an industry from the list (by title or NAICS code) or type in a term in the "Search for an industry" searchbox.  A table will result showing ratios of "FRB Assets" with different tabs to display FRB History & Sales, or IDP Assets, History, & Sales.  Use the "About eStatement Studies" tab to find definitions of the various "Financial Ratio Benchmarks" and "Industry Default Probability" data points.

           Industry Ratios found in RMA Annual eStatement Studies Online Edition:  Current Ratio; Quick Ratio;
           Sales/Receivables; 
Days’ Receivables; Cost of Sales/Inventory; Days’ Inventory; Cost of Sales/Payables; Days’
           Payables; Sales/Working Capital; Earnings Before Interest and Taxes (EBIT)/Interest; Net Profit + Depreciation,
           Depletion, Amortization/Current Maturities Long-Term Debt; Net Fixed Assets/Tangible Net Worth; Total
           Liabilities/Tangible Net Worth; Profits Before Taxes/Tangible Net Worth; Profit Before Taxes/Total Assets; Net
           Sales/Net Fixed Assets; Net Sales/Total Assets; Net Sales/Total Assets; Depreciation, Amortization, Depletion
           Expenses/Net Sales; Officers’, Directors’, Owners’ Compensation/Net Sales.

 

Mergent Online has fifteen years of financial information on publicly traded companies only, including over 25,000 domestic and 12 million international companies traded on the NYSE, AMEX, and NASDAQ.  Search for your company, then under Company Financials tab, choose Ratios.  These ratios are for individual companies, not the industry as a whole.

Company Financials tab – Ratios section – 15-year history – can download into Excel:  ROA Net, ROE Net, ROI Operating, EBITDA Margin, Calculated Tax Rate, Revenue per Employee, Quick Ratio, Current Ratio, Net Current Assets, Long Term Debt to Equity, Total Debt to Equity, Interest Coverage, Total Asset Turnover, Receivables Turnover, Inventory Turnover, Accounts Payable Turnover, Accrued Expenses Turnover, Property/Plant & Equipment Turnover, Cash & Equivalents Turnover, Cash Flow per Share, Book Value per Share.  Additional Ratios found in Reports tab - Mergent Reports - Factsheets provides a 6-year history of:  EBITDA Margin, Net Margin, Asset Turnover, Debt to Equity, Price Range, P/E Ratio Range, Average Yield.

Using Mergent Online, you may also generate a multiple company comparison report:  click on the Report Builder tab, then Comparison Reports, then Compare Company Against Industry.  Use the “Report Item Selection” to select data items:  pick the Ratios you wish to compare (one ratio at a time), using the ">" Report Item button.  Be sure to also select "include average" and hold down the shift key to select multiple years.

Company Ratios included in the Comparison Reports:  Advertising % TR; Calculated Tax Rate %; Current Ratio; Earnings Before Tax Margin %; EBITDA Margin %; Gross Margin %; Interest Coverage; Inventories % TA; Inventory Turnover; Loans to Deposits (Banks Only) Long-term Debt/Equity; Loss Ratio % (Insurance Only); Long-term Debt to Equity; Net Current Assets % TA; Net Interest Margin % (Banks Only); Net PPE% TA; Net PPE Turnover; Net Profit Margin %; Operating Margin %; Quick Ratio; T&D % TR; Revenue per Employee; ROA % (Net); ROE % (Net); ROI % (Operating); Selling Gen & Admin % TR; Total Asset Turnover; Total Debt to Equity.

Mergent First Research provides previous year ratios for over 900 industry segments.  To find them, type in a keyword or industry code in the main search box.  When you are in an indusltry profile, click "Financial Information" in the left column.  Scroll down to "Financial Ratios".

                Industry Ratios found in Mergent First Research:  Quick Ratio, Current Ratio, Current Liabilities to Net Worth,
            Current Liabilities to Inventory, Total Debt to Net Worth, Fixed Assets to Net Worth, Days Accounts Receivable,
            Inventory Turnover, Total Assets to Sales, Working Capital to Sales, Accounts Payable to Sales, Pre-Tax Return
            on Sales, Pre-Tax Return on Assets, Pre-Tax Return on Net Worth, Interest Coverage, EBITDA to Sales, Capital
            Expenditures to Sales.

Value Line Investment Survey has current information for 104 industries.  To find a given industry's report, click on
Lookup Industry in the left column, then click on the pdf icon for the industry in question.

           Industry Ratios included in Value Line: Operating Margin, Income Tax Rate, Net Profit Margin, Return on
           Total Capital, Return on Shareholder Equity, Retained Earnings to Common Equity, All Dividends to Net Profit,
           Average Annual Price to Earnings Ratio, Relative Price to Earnings Ratio, Average Annual Dividend Yield.


Standard & Poor’s Industry Surveys
  (AUD REF HC106 .6 .S74) Available in book form only at the Library, the Industry Surveys are a 2-volume set which is printed quarterly, with information for each report updated twice annually.  Provides key current statistics and ratios pertinent to each industry profiled.  Companies are compared to other companies rather than to the industry as a whole.

Reuters Investor  For each company featured in Reuters, both industry and sector ratios are provided.  To search Reuters, type in the company name, click on the ticker symbol, and choose the Financials tab.  Reuters' Valuation Ratios include: Price/Earnings, Price to Sales, Price to Book, Price to Cash Flow, Dividend Yield, Inventory Turnover, Payout Ratio, Quick Ratio, Current Ratio, Return on Equity, and more.

Yahoo!  Finance Industry Center  Gives current performance information for over 210 industries.  Use either the "Locate Industry by Company" search box in the upper right or the "Industry Index" in the lower left to locate your industry executive summary.  Yahoo's Industry Statistics ratios include:  Price / Earnings, Price / Book, Net Profit Margin, Price to Free Cash Flow, Return on Equity, Total Debt / Equity, and Dividend Yield.

Many trade associations and other specialized organizations also publish financial ratios, and ratios sometimes appear in newspapers and journal articles.  MSN can help find a given company’s key current, industry, & S&P ratios:  Sales Growth Rate, Net Income, 5-year Sales Growth Average, 5-year Net Income Average, and 5-year Dividend Average.

Top 3: D&B, RMA, Troy's

The Three Most Important Print Sources for Financial and Operating Ratios

The major sources for industry ratios are books & e-books published by Dun and Bradstreet (D&B) & Risk Management Assoicaiton (RMA), and books published by Leo Troy (now published by the Commerce Clearing House).  D&B gives ratios for the largest number of industry groups.  RMA gives the largest number of ratios and also provides figures for the preceding five years.  Troy’s Almanac gives the most detailed income statement ratios and its figures are derived from the largest database.  Actual statistics for given ratios may differ between the various resources.

1.  Dun & Bradstreet's Key Business Ratios                                            AUD/SCH REF HF5681 .R25 I524

This source includes 14 ratios for about 800 selected four-digit SIC codes.  Based on Dun and Bradstreet’s own database of credit reports, this includes more industry groups than RMA or Troy, but less information about each group.  Use the above link to try searching the electronic edition by either SIC code, Line of Business, or Asset Range.  Also, both the Chicago and Schaumburg Campus Libraries hold this title in paper; AUD = back to 1984-85, SCH back to 1997-98.

Ratios found in D&B:  Quick Ratio, Current Ratio, Current Liabilities to Net Worth, Current Liabilities to Inventory, Total Liabilities to Net Worth, Fixed Assets to Net Worth, Collection Period, Sales to Inventory, Asset to Sales, Sales to Net Working Capital, Accounts Payable to Sales, Return on Sales (Profit Margin), Return on Assets, Return on Net Worth (Return on Equity).

 

2. eStatement Studies (Risk Management Association)                              SCH REF HF5681 .B2 R58

This source includes 19 ratios for about 350 selected six-digit NAICS codes.  Information is derived from participating U.S. banking institutions' customers' annual statements.  Tables include quartile measures and industry-wide figures for total sales and assets.  An excellent introduction defines and explains each ratio (online, click on "About eStatement Studies" and choose "Financial Ratios Benchmark Data" to better understand the ratios).  The print edition of RMA’s Annual eStatement Studies can be difficult to navigate.  First, go to the page which lists the NAICS codes and corresponding page numbers.  Then turn to the corresponding page.  To read the report, go to the column in the middle of the table, entitled “Comparative Historical Data.”  From this column, select the year that you need.  The last five years are listed.  Match the year with the type of data needed.  The Schaumburg Campus Library has in paper back to 1997; the Chicago Campus Library back to 1984.

Ratios found in RMA:  Current Ratio; Quick Ratio; Sales/Receivables; Days’ Receivables; Cost of Sales/Inventory; Days’ Inventory; Cost of Sales/Payables; Days’ Payables; Sales/Working Capital; Earnings Before Interest and Taxes (EBIT)/Interest; Net Profit + Depreciation, Depletion, Amortization/Current Maturities Long-Term Debt; Net Fixed Assets/Tangible Net Worth; Total Liabilities/Tangible Net Worth; Profits Before Taxes/Tangible Net Worth; Profit Before Taxes/Total Assets; Net Sales/Net Fixed Assets; Net Sales/Total Assets; Net Sales/Total Assets; Depreciation, Amortization, Depletion Expenses/Net Sales; Officers’, Directors’, Owners’ Compensation/Net Sales.

3. Almanac of Business and Industrial Financial Ratios (Troy's)     AUD/SCH REF HF5681 .R25 I524

This source includes 20 ratios for about 180 selected six-digit NAICS codes including a detailed breakdown by size of assets owned by the enterprises.  Figures are based on IRS annual statistics, which provide a larger database than that used by either D&B or RMA, but these statistics are slow to appear and provide no balance sheet data.  The income statement ratios, however, are very detailed.  Trends in selected ratios and factors over a ten-year period are shown for each industry group.  The Schaumburg Campus Library has in paper back to 2003; the Chicago Campus Library back to 1978.

Ratios found in Troy's:  Current Ratio, Quick Ratio, Net Sales to Working Capital, Coverage Ratio, Total Asset Turnover, Inventory Turnover, Receivables Turnover, Total Liabilities to Net Worth, Current Assets to Working Capital, Current Liabilities to Working Capital, Working Capital to Net Sales or Total Receipts, Inventory to Working Capital, Total Receipts to Cash Flow, Cost of Goods to Cash Flow, Cash Flow to Total Debt, Debt Ratio (Total Liabilities to Total Assets), Return on Total Assets, Return on Equity Before Income Taxes, Return on Equity After Income Taxes, Profit Margin (Before Income Tax), Profit Margin (After Income Tax).

Industry Ratios: SIC Codes

Ratios are quantitative indicators of financial strength and operating success.  The sources listed in this guide provide ratios for entire industries or groups of companies.  If you have a company in mind that you are interested in finding industry benchmark ratios for, start with Mergent Intellect  Once in Mergent Intellect, find your company, then click on "Competitors List" in the left column.  You will see the previous year's sales, net income, and employee count for your company's top competitors.  Clicking on "Industry Details" will provide you with the company's SIC and NAICS codes. 

Moving further back in time:  If you would like three years' of industry ratios, use the SIC code that you found in Intellect and check in Key Business Ratios Online. To locate industry ratios going back 7 years, use the NAICS code that you found in Intellect and try out eStatement Studies (Risk Management Assn.).

 

SIC/NAICS Conversion

Grouping companies into industries was done according to the Standard Industrial Classification (SIC) system established by the US Government until 1997, when it was replaced by the North American Industry Classification System (NAICS).  The NAICS site has three conversion tables to navigate between the 2007 NAICS and 1987 SIC classification systems.  Industry ratios provide half of the information needed to compare the performance of a particular company to an industry as a whole.

NAICS Classification Manual   AUD/SCH REF HF1042 .N67 2002

Standard Industrial Classification Manual        SCH REF HF1042 .S73 1987

Concentration Ratio

To identify an industry's Concentration Ratio, which is a measure of the relative competitiveness of the firms that comprise it, just tally up the market share of the top four firms.  Roughly, if their combined market share is greater than 50%, the market may be considered an oligopoly; if less than 50%, it may be considered competitive.

Market Share Reporter contains reports with the top 5 firms' market share in many industries.

The 2007 U.S. Census Bureau's Economic Census contains detailed tables illustrating the degree of concentration for the 4, 8, 20, and 50 largest firms in a given industry.