Finance

Norms and Ratios

When starting a business or comparing a company's performance to competitors in its industry, you will need sample financial statements, also known as “industry norms” or “operating ratios”. Data for typical operating items such as assets, debt, sales, profit, labor, advertising, rent, and insurance expense, as well as other financial ratios may be found in the sources listed below. These figures are published by industry groups, banks, and trade associations for use as benchmarks. They are compiled by analyzing the financial statements of companies in that particular industry and calculating the mean or average figure for selected categories.

Company Ratios

Industry Ratios

Calculate and Interpret Ratios, Using Books

Calculate and Interpret Ratios, Using Websites

Company Ratios

• Lexis Nexis
  At the opening screen, you will already be in the Company Dossier screen.
  
  1. Type the name of your company in the company name box.
  2. When a list of choices comes up, select your company.
  3. From the Reportscolumn on the left, under: Financials, select: Overview
     
     
  
  
  4. Scroll down until you reach the category, Ratio Analysis
     



• Business Insights Global
  1. From the opening screen, type: Sprint
  2. When the results appear, select the Financials link.
  
  
  
  3. From the tabs along the top, select: Financials Dashboard
  
  
  
  4. From the tabs, select: Ratios
  
  
  
  5. Scroll through to see a long list of ratios.
  

Industry Ratios

• BizStats.com
  
  BizStats is an online source for small business statistics. Provides instant access to useful financial ratios, business statistics and benchmarks.
• Business census.gov
  
  Based on information from the Economic Census.
• Damodaran Online
  
  A professor from the Stern Business School at NYU has provided a wealthy website with numerous files. Among them, he has provided a chart service, comparing company and industry ratios. Make sure you are on the Data Page: Select Updated Data from the navigation column.
• Economic Census: Concentration Ratios
  
  All of these reports classify industries by the percent of output accounted for by the largest 4, 8, 20 and 50 companies.
• Google Finance
  
  Features a nicely displayed wide array of industry ratios. Look up a particular company, then the data for the company and the industry are posted side by side.


• Yahoo! Finance Stock Screener
  
  Choose industry, and selected ratios for sales, profitability and valuation. For current year only.

Calculate and Interpret Ratios, Using Books

The sources listed below give definitions or explain how ratios are calculated and how they can be used to analyze the financial health of a business or industry. Slide your mouse over the book jacket for more info. Click on it to see the catalog entry.

Calculate and Interpret Ratios, Using Websites

• biz/ed
  
  If you only check out one site, this is the ONE!
  These ratio analysis materials were prepared for Biz/ed by Duncan Williamson, a teacher, a freelance author and business consultant who prepares teaching/learning materials for accountants and students of accounting.
• Dun and Bradstreet
  Fourteen Key Business Ratios Used by D&B.
• Financial Accounting Standards Board
  
  The Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports that are officially recognized as authoritative by the Securities and Exchange Commission.
• Investopedia
  
  A Forbes Media company that provides clear definitions and tutorials for calculating a variety of financial ratios.
• Motley Fool
  
  A privately-held multi-media company that is a top provider of investment advice and financial information.
• Planware
  
  PlanWare is one of many software packages for business and financial planning applications. Even though it is a fee based program, the site offers some helpful charts and information.
• Study Finance
  
  studyfinance.com is the web site for students of introductory finance at The University of Arizona. It is designed to serve as a starting point to learn about what finance majors do, how to get started in a finance career, and the finance curriculum at The U of A.