The University of St. Thomas

Finding Business Ratios

Finding Business Ratios

Ratios are an analytical tool to help evaluate a company's performance using standard comparisons of items on the company's financial statements. They are used to evaluate aspects of profitability, solvency, efficiency, and liquidity.  Ratios can be used to evaluate performance over time and between a company and its peers.  Financial ratios for industries (sometimes called "industry norms") reflect the average value for a particular type of business.

Industry Ratios

Databases:

  • RMA eStatement Studies. Online version of the Annual Statement Studies print source from RMA.  Organized by NAICS codes.  Most users want the Financial Ratio Benchmarks (see tabs labeled FRB) for standard operating ratios for comparative financial statement analysis.  Stratified by size of company sales or assets.
  • Factiva.  Provides a nice comparison of company and industry ratios.  Under Companies/Markets tab, select Company, search for the company you want,  then look under Reports for the Ratio Comparison Report.  Factiva ratios tutorial.
  • Mergent Online.  To obtain industry ratios, select companies by SIC code, NAICS code, or other criteria, add them to a Company Analysis List.  There are two options for ratios under Comparison Reports option: 1) Select Compare Company Against Industry, then select Peer Group and Type of report, check the box to Use Extended Report Items, under category select Ratios, under sub-category select the ratios you wish to use individually to add them to the report, check the box to Include Average in Heading, and Create Report. 2) Select Compare Company Against Custom Group (once you have added your desired companies to the list), then set parameters as in option 1.  Mergent ratios tutorial.

Print Sources:

  • Annual Statement Studies (Risk Management Association/RMA).   Ref. HF 5571 .A5
    Financial and operating ratios for over 350 lines of business, arranged by NAICS code.  Provides a 5-year summary.  Contains many operating ratios not found in other sources.
  • Industry Norms & Key Business Ratios (Dun & Bradstreet).  Ref. HF 5681 .R25 D8
    Covers over 800 lines of business, arranged by SIC code.  Calculates ratios based on credit reports; does not provide historical data.
  • Almanac of Business and Industrial Financial Ratios (Troy). Ref. HF 5681 .R25 T68
    Gives ratios for about 180 lines of business, arranged by SIC code.  Gives a 10-year summary in the "trends" section.  Data is from tax returns filed with the Internal Revenue Service, so there is a time lag for some information.
  • Financial Studies of the Small Business.  Ref. HD 2346 .U5 F55
    Ratios for many lines of small business.

Special Sources:

  • Economic Census: Concentration Ratios.  Concentration ratios from the Economic Census classify industries by the percent of output accounted for by the largest 4, 8, 20 and 50 companies. Only the manufacturing report includes the Herfindahl-Herschmann Index (a measure of the size of firms in relationship to an industry and an indicator of the amount of competition among them.)  Part of the Economic Census conducted every five years by the Census Bureau.
  • Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations. Produced by the U.S. Census Bureau, presents estimated financial statements and related financial/operating ratios for domestic operations of manufacturing corporations with assets over $250,000, and corporations in mining and trade with assets over $50 million. Based on a sample survey, data are classified by industry and by asset size.

Company Ratios

Interpreting Ratios

Books:  In addition to your Accounting textbooks, try a Subject search in the CLICnet library catalog. Search for ratio analysis. Some specific titles:

  • Business Ratios and Formulas: A Comprehensive Guide.  Bragg, Steven.  Hoboken, NJ, c2002.  REF 5691 .B73 2007 (KEF, OSF); 2002 (KEF, OSF, CLIC E-book)
  • 101 Business Ratios. Gates, Sheldon. Scottsdale, Ariz. : McLane Publications, c1993.  REF HF5657.4 .G38 1993 (KEF, OSF)
  • The Vest Pocket Guide to Business Ratios. Tyran, Michael. Englewood Cliffs, N.J. : Prentice Hall, c1992.  REF HF 5681 .R25 T975 1991 (KEF)
  • Financial Statement Analysis: a Practitioner's Guide. Fridson, Martin S. New York : John Wiley & Sons, c2002.  HF 5681 .B2 F772 2002 (KEF, CLIC E-book)
  • Financial and Business Statements.  Friedlob, George T. and Plewa, Franklin J.  NY: Barron's Educational Series, Inc. c2000.  REF HF 5681 .B2 F7725 2006 (KEF, OSF)
  • How to Read a Financial Report: Wringing Vital Signs Out of the Numbers. Tracy, John. NY: John Wiley & Sons, 1999. See Chapter 22.  HF5681 .B2 T733 1999 (KEF, OSF, CLIC E-book)
  • The Edgar Online Guide to Decoding Financial Statements : Tips, Tools, and Techniques for Becoming a Savvy Investor.  Taulli, Tom. Boca Raton, Fla. : J. Ross, 2004. HF5681 .B2 T32 2004 (KEF, OSF)
  • Understanding Financial Statements. Fraser, Lyn. NJ: Prentice Hall, 2001. See Ch. 5.   HF5681 .B2 F764 2001 (KEF, OSF)
  • The Portable MBA in Finance and Accounting. Livingstone, John Lesley.  NY: Wiley, 1992.  HG4026 .P665 1992 (KEF, CLIC E-book)

Web sites:

See Also:

Research consultations

Professional reference service is available at both the St. Paul and Minneapolis campus libraries. If you are interested in a research consultation, contact:

Ryan Carter, Minneapolis, (651) 962-4646, cart9467@stthomas.edu
Marianne Hageman, St. Paul, (651) 962-5404, mdhageman@stthomas.edu
Eric Kallas, St. Paul, (651) 962-5013, epkallas@stthomas.edu
Andrea Koeppe, Minneapolis, (651) 962-4647, arhudson@stthomas.edu
Janice Kragness, Minneapolis, (651) 962-4645, jlkragness@stthomas.edu

Updated August 2008.