Financial Ratios

From Bentley Library Research Help

Contents 1 About this Library Research Guide 2 General Financial Ratio Information 2.1 Sources for definitions & formulas 2.2 What are SIC and NAICS codes? 3 Where do I find Industry Ratios? 4 Where do I find Industry Ratios for a Small Business? 5 Where do I find Company Ratios? 6 Where do I find a Company's financial statements for calculating ratios? 7 Useful websites

[edit] 1 About this Library Research Guide

Rev. 7.11.2007 (KM)

Different types of resources and access levels are indicated by the following icons:

• Print Resources are located in the Library`s Reference Collection or behind the Reference Desk. These materials are for in library use only.
• Electronic Resources are subscription databases. These resources are available to members of the Bentley Community on-campus. Off-campus access is available by using your Bentley e-mail address and network password.
• Websites are internet resources that are free.

This Library Research Guide has been compiled from publisher information, online help, how to... sections, book reviews and the Financial and Operating Ratios Guide maintained by Harvard University. The Bentley Library owns and has access to additional resources not listed below. If you are having a problem finding the information you need, ask a Reference Librarian.

[edit] 2 General Financial Ratio Information

[edit] 2.1 Sources for definitions & formulas

• Dictionary of finance and investment terms by John Downes. 7th ed. REF HG151 .D69 2006
  • More than 5,000 terms related to stocks, bonds, mutual funds, banking, tax laws, and transactions in the various financial markets are presented alphabetically with descriptions. Readers will also find a helpful list of financial abbreviations and acronyms, as well as illustrative diagrams and charts.

• Business ratios and formulas : a comprehensive guide by Steven M. Bragg REF HF5691 .B73 2007
  • Includes nearly 250 operational criteria with clear, easy-to-understand explanations that can be used right away. The Second Edition includes approximately fifty new ratios and formulas, as well as new chapters covering ratios and formulas for e-commerce and human resources. The 2002 first edition is available in the stacks.

• Encyclopedia of business and finance by Burton S. Kalinski REF HF1001 .E466 2007
  • "Covering accounting, management, marketing, law, finance, and economics, this set aims `to summarize the body of knowledge that we know as business in a single place and in language accessible to the layperson.`... All the entries are cross-referenced and include bibliographies offering print resources and web sites. Many of the entries are illustrated with photographs, tables, and figures." (--Review from Library Journal)
  • Of note are the entries on Financial Literacy, Financial Statement Analysis & Financial Statements.

[edit] 2.2 What are SIC and NAICS codes?

When looking for Industry Ratios it is important to know about and use the SIC/NAICS codes . Why? If you know the industry code, you can easily identify your industry`s ratios within each of the recommended resources.

The U. S. Government has categorized companies according to their primary economic activity. These groupings or industries have been given a unique hierarchical number (a SIC and/or Naics code) which helps to easily identify these industries within the context of what they do.

From the 1930`s to the 1990`s the official industry classification system for the United States was the Standard Industrial Classification (SIC) system. SIC codes were based on four digits. SIC codes are no longer being updated and have been replaced by the six digit codes of the North American Industry Classification System (NAICS). NAICS codes were developed in response to the establishment of new industries in the technology and services sectors. It is still important to know about the SIC codes because many of the Industry Ratio Resources are still based on the SIC codes.

How do I find out the correct code for my industry?

• Business directories & company profiles usually provide the primary and secondary codes for each company.
• Search by keyword at North American Industry Classification System (NAICS) to find out the code.

Published online by the Census Bureau contains detailed descriptions and a searchable index. Includes 1997 NAICS and 1987 SIC Correspondence Tables.

• Browse the print manuals at the Reference Desk.

The North American Industry Classification System: United States, 2007 REF DESK HF1042 .N6777 2007

The North American Industry Classification System: United States, 2002 REF DESK HF1042 .N6777 2002

Standard industrial classification manual REF DESK HF1042 .U5 1987

Of Note: Many databases and handbooks identify industries with different titles or keywords, but the SIC/NAICS codes remain the same across the different resources.

[edit] 3 Where do I find Industry Ratios?

Where can I find information on standard industry ratios so I can compare the performance of company X to other companies in the same industry?

• Almanac of business and industrial financial ratios (commonly known as Troy's Almanac) by Leo Troy REF HF5681.R25 T68 Published annually...Current year on Reserve & older issues in Reference.
  • Troy`s almanac provides updated performance data for 50 operating and financial factors in 192 industries, derived from the latest available IRS figures on US and international companies. The data for each industry are subdivided into 13 categories based on company size. Covers all variety of factors relating to operations, operating costs, financial performance, and an array of critical financial factors in percentages including debt ratio, return on assets, return on equity, and profit margins. Each table is divided into 13 asset sizes to facilitate comparison. Organized according to NAICS Codes. Includes descriptive pages that explain the formulas and data used for calculating the ratios.
• Annual statement studies (commonly known as RMA Annual Statement Studies) REF HF5681.B2 R6 Published annually...Current year on Reserve with older issues in Reference.
  • Coverage of over 700 industries classified and organized according to NAICS codes. Provides nineteen ratios widely used in the financial services industry with the accompanying balance sheet information. Data is derived directly from 190,000 financial statements of RMA member financial institutions (US) borrowers and prospects. Included are various types of liquidity, coverage, leverage, and operating ratios. Data arrayed by asset and sales size. Six different asset and sales size categories are presented. Four years of trend data available in each yearly issue. Published by the Risk Management Association and formerly known as the Robert Morris Association Annual Statement Studies. Includes descriptive pages that explain the formulas and data used for calculating the ratios.
• Industry norms and key business ratios (commonly known as Dun & Bradstreet or D&B Industry Ratios) REF HF5681.R25 I525 Published annually...Current year on Reserve with older issues in Reference.
  • Includes over 800 lines of business as defined by the U. S. Standard Industrial Classification (SIC) Codes. Data compiled from public and private U. S. Corporations in all size ranges. Contain fourteen indicators of performance grouped into 3 categories: solvency ratios, efficiency ratios & profitability ratios. Key ratios are broken into median figures with upper and lower quartiles. Published by Dun & Bradstreet, Inc. Includes descriptive pages that explain the formulas and data used for calculating the ratios.
• Cost of Capital Yearbook (Ibbotson`s) REF HC110 .C3 C67 Published annually...Current year at Reference Desk with older issues in Reference.
  • Data provided for more than 300 U. S. industries, listed by SIC code. Includes five separate measures of cost of equity and weighted average cost of capital. Includes detailed statistics for sales and profitabililty, capitalization, beta, multiples, financial ratios, equity returns, and capital structure. Covers information through March of each year. Published by Ibbotson Associates. Includes descriptive pages that explain the formulas and data used for calculating the ratios.
• Factiva
  • Contains key financial ratios from sources such as Reuters Fundamentals.
    • Start with the name of a public company within the industry.
    • Click on <Companies/Markets>, then <Company> & search for the company name or ticker symbol.
    • Click on <Reports> to see the Ratio Comparison Report:
      • Compares key financial ratios of a company against its industry, sector, and the S&P 500 Index aggregates.
• Standard & Poor's Industry Surveys in Net Advantage
  • Industry surveys are updated twice yearly and provide key data on more than 50 industries from Advertising to Transportation. Choose the Industry tab at the top of the screen and select the Industry Survey from the dropdown listing. Sections of interest include: Key Industry Ratios And Statistics and Comparative Company Analysis.
• Value Line Research Center
  • The Value Line Investment Survey is a comprehensive source of information and advice on approximately 1,700 stocks, more than 90 industries, the stock market, and the economy. Current quarterly data with 5 years of annual data.
    • Under Quick Index, click on <Standard Edition>, and then click on Industry Lookup.

• Search by Industry name or browse the listing of 101 Industries and click on to access the report.
• The Value Line Industry page will include the P/E Ratio and other Composite Statistics

• Bloomberg
  • Industry ratios reports can be run for up to 20 user-specified data categories by using the "RV" (relative value) function. Electronic resource only available in the Trading Room.

[edit] 4 Where do I find Industry Ratios for a Small Business?

• Financial Studies of the Small Business REF HD2346.U5 F55A Published annually.
  • Provides ratios for small businesses or businesses with a total capitalization under $2,000,000. Arranged by asset size and establishment type; financial and operating ratios are provided for about 50 lines of small business and manufacturing. Published by Financial Research Associates.

[edit] 5 Where do I find Company Ratios?

• Bloomberg
  • Provides quarterly and yearly ratios for virtually every public company traded on every stock exchange worldwide. Electronic resource only available in the Trading Room.
• Factiva
  • Provides ratios for public companies. Contains key financial ratios from sources such as Reuters Fundamentals.
    • Click on <Companies/Markets>, then <Company>.
    • When the profile is retrieved click on <Financial Results> to see:
      • Key Ratios
    • Or, click on <Reports> to see:
      • Ratio Comparison Reportwhich compares key financial ratios of this company against its industry, sector, and the S&P 500 Index aggregates.
      • Detailed Company Profile Report With Financial Results Report: A detailed outline of this company`s primary activities, top officers and executives, competition, history, products, services, key financial ratios, and full balance sheet, income statement and cash flow statements.
• Standard & Poor`s Stock Reports in Net Advantage
  • In Publication Search box on right, select publication Stock Reports from the dropdown menu and search by ticker symbol or company name. Page 3 of the report includes Key Growth Rates & Averages, Company Financials, Income Statement Analysis and Balance Sheet & Other Financial Data.
• Thomson Research
  • Search for information on companies publicly traded on the major U.S. stock exchanges by ticker symbol or company name. Included are SEC and Worldscope reports which have a Fundamental Ratios section.
• Value Line Research Center
  • The Value Line Investment Survey is a comprehensive source of information and advice on approximately 1,700 stocks, more than 101 industries, the stock market, and the economy. Updated quarterly with 10 years of historical data. For more historical data see Value Line Historical Reports
    • Under Quick Index, click on <Standard Edition>, and then click on Company Lookup.
    • Search by Company name or ticker symbol. The Value Line Company page includes P/E Ratio.

[edit] 6 Where do I find a Company's financial statements for calculating ratios?

• Thomson Research
  • Provides corporate reports and company financials, including 10-Ks, 10-Q's, tear sheets, stock quotes, and daily, weekly and monthly stock graphs, from 1995 to the present. Search for information on companies publicly traded on the major U.S. stock exchanges by ticker symbol or company name.
• Factiva
  • Contains income & balance sheet information for public companies.
    • Click on <Companies/Markets>, then <Company>.
    • When the profile is retrieved click on <Financial Results> to see:
      • Balance Sheet - Annual
      • Cash Flow - Annual
      • Income Statement - Annual
    • Or, click on <Reports> to see:
      • Detailed Company Profile Report With Financial Results Report: A detailed outline of this company`s primary activities, top officers and executives, competition, history, products, services, key financial ratios, and full balance sheet, income statement and cash flow statements.
• Standard & Poor`s Stock Reports in Net Advantage
  • In Publication Search box on right, select publication Stock Reports from the dropdown menu and search by ticker symbol or company name. Page 3 of the report includes Company Financials, Income Statement Analysis and Balance Sheet & Other Financial Data.
• Value Line Research Center
  • The Value Line Investment Survey is a comprehensive source of information and advice on approximately 1,700 stocks, more than 101 industries, the stock market, and the economy. Updated quarterly with 10 years of historical data. For more historical data see Value Line Historical Reports
    • Under Quick Index, click on <Standard Edition>, and then click on Company Lookup.
    • Search by Company name or ticker symbol.
    • The Value Line Company page includes an income statement and current financial position.

[edit] 7 Useful websites

• An extensive annotated guide to additional sources entitled Financial and Operating Ratios Guide has been prepared by the The Harvard Business School Baker Library.
• The Foster Businss Library of the University of Washington has created a Financial Ratios Calculator based on information from Dun & Bradstreet`s Industry Norms and Key Business Ratios and the RMA`s Annual Statement Studies.