Industry Information: Industry ratios

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Industry Ratios - Online Sources

Start with RMA e-Statement Studies, which is organized by NAICS codes.  Be aware that its coverage is primarily for the US. 

For Refinitiv Workspace you will need to start by searching for a specific public company in the industry you're interested in.  Note that this database requires registration for an individual account.

What are industry ratios?

'Industry ratios' are composites (averaged aggregates) of the 'financial ratios' for several (or many) individual companies.  (Financial ratios show the relationships between two bits of financial information culled from a company's financial statements, e.g. stock price to stock earnings.)  When the ratios are calculated from data in the financial statements of several (or many) companies in the same industry, then they become industry ratios. 

They are most often used to compare one company's financial performance to the financial performance of many comparable companies, in order to assess the 'health' of that one company ...

Basically they help to answer the question:  is company x doing as well as, better or worse than its peers and competitors?

Problems: 

1. How do you define the industry you're looking at? 

It could be by using NAICS or GICS codes, or another classification system.  Or it could be that you have to define your industry yourself, based on other criteria ...

2. How do you account for companies of different sizes? 

Microsoft and your local website designer are technically in the same broad industry (software services), but their vastly different sizes make a direct comparison useless.  The RMA Annual Statement Studies provide the ratios for different sizes companies.  Financial Studies of the Small Business only looks at businesses with capitalization of less than $1-2 million, but is very old and no longer published.

Industry Ratios - Print Sources

Yeah, I know ... these are not online!  But they're classics, and you'll hear them mentioned regularly.  Especially the RMA and Leo Troy books ...  For small businesses, Financial Studies of the Small Business may also be helpful though it is somewhat dated.

About ratios

If you're new to ratios, below are some sources for you.