Reference:FINANCIAL RATIOS

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FINANCIAL RATIOS (INDUSTRY NORMS)

Students sometimes ask where they can quickly compare their company's performance to the industry average.

See Mergent Online and Factiva and Key Business Ratios

Within Mergent Online students can do a company search and then click on the COMPANY FINANCIALS tab then click on the RATIO sub-tab to see the latest 3 years of ratios. There is also an ANALYSIS sub-tab under COMPANY FINANCIALS that will prove useful for the students.

Within Factiva select the Company/Market tab, next provide the ticker symbol or company name. After their company information page is returned have them scroll to the bottom right hand corner and select from the REPORTS SECTION both the "FINANCIAL SNAPSHOT PLUS PROFILE" which provides 1, 3 and 5 year history of ratios and also the "COMPARISON REPORT" which provides a side-by-side company and industry ratio comparison.

Behind the Reference Desk

Standard & Poor's Statistical Service (by S & P's broad industry classifications)

RMA Annual Statement Studies (Robert Morris Associates) (by SIC code)

Industry Norms and Key Business Ratios (Dun and Bradstreet) (by SIC code) (Also see online version)

Standard & Poor's Analyst's Handbook (by S & P's broad industry classifications)

Almanac of Business and Industrial Financial Ratios, by Leo Troy (by NAICS code)

Students will need an SIC code AND a NAICS code to be able to take full advantage of these resources.

In the Reference Stacks

Mergent's Industry Review (Mergent, formerly Moody's) (by SIC code)

All of t hese sources take an SIC category for a company and compare it to the industry aggregate. One of the problems with this comparison approach is that you are only comparing with one SIC code, and most companies have several classification codes.

Price to Earnings (P/E) Ratio: http://www.wilshire.com/Indexes/Broad/Wilshire5000/Characteristics.html

Earnings per Share (EPS): See S&P Stock Reports, Mergent, or Factiva.

See also http://infodome.sdsu.edu/research/guides/business/finance.shtml#ratios and "Risk Management"

Sullivan / Perkins

7/06

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