Financial and Operating Ratios
Library User's Guide

Financial and operating ratios, such as gross profits as a percent of sales, are derived from company financial statements. Ratios are calculated for categories such as liquidity, asset management, debt management, profitability, and market value. They are used to study changes in a company's operations over time. Ratios for a particular company also are compared with those for the industry as a whole or with those for a specific competitor or group of competitors. The purpose is to identify and then analyze deviations from industry averages.

The sources on this guide are a sample of important print and online ratio resources. They include books at Rod Library, online sources to which Rod Library subscribes (marked with an *), and other web sources which at this time are free or partially free. Call numbers are listed under the titles of print sources available at the library. Underlined titles can be accessed via the Web. If accessing a Rod Library subscription database from off campus, you will be prompted for your last name and UNI student ID number.

Other Library User Guides go into more detail on finding information on topics such as accounting, companies, economics, finance, financial ratios, industries, management, and marketing.

FINDING BOOKS  top

Use UNISTAR, the online catalog, to identify books which explain ratio analysis or provide the actual  ratios for industries and companies. Major subject headings for finding books about ratio analysis include:

ratio analysis                              financial statements

corporations finance

Books which provide ratios for a specific industry are listed under various subject headings. If unsure of the most appropriate subject heading, use the UNISTAR keyword search, and combine terms such as ratio* or statistic* or cost* with an industry such as sporting goods. (The asterisk allows for retrieval of words with various endings.) Such a search would be structured as follows:

(ratio* or statistic* or cost*) and sporting goods

These are examples of books that explain business ratios and how to use them in analyzing company finances and operations:

Financial Analysis Tools and Techniques : A Guide for Managers
UNI Stacks HG4026 .H436 2001
Textbooks such as this one explain how to calculate and interpret financial and operating ratios. They also typically discuss potential problems such as industry definition and comparability of data.

Business Ratios and Formulas: A Comprehensive Guide
UNI Stacks HF5691 .B73 2007


INDUSTRY CLASSIFICATION CODES  top

It is important to know about industry classification codes because many sources use them to arrange business information of various sorts, including financial and operating ratios. 

The United States government developed the Standard Industrial Classification (SIC) to standardize reporting of statistics on companies and industries.  The governments of the U.S., Mexico, and Canada developed the North American Industry Classification System (NAICS), which  replaced the SIC system in 1997. However, many business information sources continue to use the SIC system instead of or in addition to the NAICS system.  It's often necessary to find the most appropriate SIC or NAICS code for a particular company when comparing its ratios with those of the industry.

D&B Million Dollar Directory
UNI Reference HG 4057 A29
One way to identify the SIC codes for a particular company is to consult online or print directories such as this one. Entries include the company's lines of business as defined by the SIC scheme. More than one SIC may be indicated; in such cases, the primary line of business is listed first. Company entries in online sources such as Business & Company Resource Center* also give company SIC and NAICS numbers, the first codes being the firm's primary line of business.

North American Industry Classification System (NAICS)
UNI Reference HF 1042 N67 & UNI Docs PrEx2.6/2:27/2002
NAICS is a system that provides common industry definitions for the U.S., Mexico, and Canada. It is gradually replacing the SIC system in the United States. It includes a table that translates 1987 SIC codes to 1997 NAICS codes and vice versa. A detailed alphabetical product index can help in finding the right code.

Standard Industrial Classification Manual 
UNI Reference HF 1041 U613 1987 & UNI DocS PrEx 2.6/2:In 27/ 987
This is a guide to the Standard Industrial Classification system developed by the U.S. government to standardize reporting of industry and company data. As noted above, it is being replaced by the NAICS system, but many reference sources continue to use SIC codes. A detailed alphabetical product index can help in finding the right code.


MULTI-INDUSTRY RATIO SOURCES top

The sources in this section provide ratios for many different industries. Most include an introduction that explains how the data were collected and how to interpret the various ratios. In some cases, ratios are provided in separate tables for those companies that made a profit. In other cases, upper quartile, mean, and lower quartile ratios are provided. Some of the sources arrange ratios by SIC codes, and some arrange them by words such as apparel, automobiles, and beverages.

Almanac of Business and Industrial Financial Ratios
UNI Reference HF 5681 R25 T68
Library has: 1972, 1975, 1978-
Compiled from 4.7 million corporate federal income tax returns, this source provides 50 ratios for the current year for 179 industries. Selected ratios are given for the last ten years. Includes separate ratio tables for all companies and for those which made a profit within each industry. Figures also are broken down by size of companies. Published annually, it is the only publicly available source based on statements of all active U.S. corporations.

Standard & Poor's Analysts' Handbook
UNI Reference HG 4519 S772 (most recent); Earlier in UNI Stacks
Library has: 1980-
Provides more than 30 years of composite financial data, on a per share basis, for more than 120 industries as defined by the publisher, Standard & Poor's.

BizStats.com
Provides profitability, operating, and other ratios for small business types such as sporting goods stores and eating and drinking establishments.

Cost of Capital (Ibbotson)
UNI Reference HC110.C3 C67 2007 
Contains industry financial data such as revenue, capital structure, margins, cost of equity capital, and weighted average cost of capital. Industries are defined at the two, three, and four digit SIC industry code level. 

Financial Studies of the Small Business
UNI Reference HD 2346 U5 F55
Library has: 1976, 1979, 1981, 1984, 1987-
Provides ratios for various types of small businesses--retail, wholesale, services, contractors, professional services, and manufacturers--based on financial statements of a sample of firms with total capitalization under $1 million. Ratios broken down by size of companies making up industry samples.

Ibbotson Associates' Beta Book Publication
UNI Reference HG4028.V3 I23 1st ed. 2002
Contains betas for more than 5000 companies for calculating CAPM and Fama-French costs of equity.

Industry Norms and Key Business Ratios
UNI Reference HF 5681 R25 I525
Library has: 1982/83, 1984/85-
Published by Dun & Bradstreet, provides ratios for about 800 industries arranged by SIC code. Provides mean and upper and lower quartiles for the various ratios.

IRS Corporate Financial Ratios
UNI Reference HG4050 .I77
Schonfeld & Associates calculates financial ratios from IRS corporate filings for 195 industries, arranged by NAICS codes. Ratios are broken down by size of firm; within size breakdowns, figures are given for firms that made a profit and for those that did not. 

*Mergent Online (formerly called FIS Online and Moody's Manuals)
Provides financial and narrative description and analysis of about 10,000 publicly held U.S. companies. In Advanced Search, can look up companies by SIC code and create customized tables that show variables of interest for all companies or for a specific company in comparison with other companies in the industry.

RMA Annual Statement Studies
UNI Reference HF 5681 B2 R6 
Library has: 1971-1977, 1979- (Formerly: Annual Statement Studies)
Compiled by Robert Morris Associates, a national association of bank officers. Each annual issue provides six years of ratios for about 600 industries arranged by SIC code. Figures for the latest year are broken down by size of companies making up the sample. Provides median, upper, and lower quartile figures for ratios.

SOA Tax Stats - Corporation Data by Sector or Industry
Aggregation of IRS filings by companies in various industries.

*Value Line Investment Survey
HG 4501 V26 Microfilm  (Oct. 1972-1979) and Microfiche (1980-2004)
Latest online.
Contains six years of financial data and ratios for 95 industries. Also contains up to 16 years of financials for about 2,200 companies. Pages for industries and companies include forecasts out five years. Pages for companies in particular industries are grouped together and preceded by a page on the industry as a whole. 


SPECIFIC INDUSTRY RATIO SOURCES top

Each source in the previous section provides ratios for numerous industries. The sources in this section focus on specific industries and often provide more detailed ratios and other statistics. Lines of business not covered by sources in the previous section might be covered by sources such as the following.

The Cost of Doing Business for Sporting Goods Stores and Team Dealers
UNI Reference HD 9999.S92 C68 (most recent); Earlier in UNI Stacks
Library has: 1981/82-1985/86, 1989/90-1991/92, 1995/96-
Provides various ratios broken down by store sales volume category, single or multiple store operations, high profit stores, and so on.

Cost of Doing Business Report
UNI Reference ML 3790 N2762 (most recent); Earlier in UNI Stacks
Library has: 1993-
Provides ratios for various types of music retail outlets; figures are broken down by type of outlet, sales, number of stores, and high-profit stores.

NARDA Presents the ... Cost of Doing Business Report
UNI Reference HF 5429.3 N27 (most recent); Earlier in UNI Stacks
Library has: 1980, 1983, 1986-1988, 1990, 1993- (Formerly: 
NARDA/NASD Costs of Doing Business Survey; NARDA's Costs of
Doing Business Survey)
Ratios broken down by sales and by region for all dealers and also for high-profit dealers. Covers appliance, electronics, and furniture dealers.

State of the Industry
UNI Reference HF 5469.25 S8 (most recent); Earlier in UNI Stacks
Library has: 1981- (every third edition) (Formerly: State of the Convenience Store Industry)
This report on the convenience store industry includes overall industry statistics; industry averages such as gross margin and turnover on numerous product categories; and store services.


COMPANY RATIO SOURCES top

The sources in this section provide company ratios already calculated by the respective analysts and publishers. 

Bank and S&L Quarterly: Ratings and Analysis
UNI Reference HG 2401 B355 (most recent 4 quarters); Earlier in UNI Stacks
Library has: Sept. 1991-
Published by Sheshunoff, this source publishes data on liquidity, earnings, loan exposure, capital adequacy, and other ratios for specific banks and savings and loans.

*Investext Plus
Wall Street analyst reports often include company ratios and comparisons with competitors, from an investment perspective. Also in Business & Company Resource Center.

Mergent's Industry Review
UNI Reference HG 4961 M68 
Ranks 3,500 companies in 137 industry groups on factors such as profit margin, pe ratio,  and return on assets.

*Mergent Online (formerly called FIS Online and Moody's Manuals)
Provides financial and narrative description and analysis of about 10,000 publicly held U.S. companies. In Advanced Search, can look up companies by NAICS or SIC code and create customized tables that show variables of interest for all companies or for a specific company in comparison with other companies in the industry.

Standard & Poor's Industry Surveys via NetAdvantage*
UNI Stacks HC 101 S73
Library has: Oct. 1990-2004 Latest online.
Profiles 52 industries and provides five years of already calculated ratios for companies in these industries.

Standard & Poor's Stock Reports via NetAdvantage*
UNI HG 4905 S445
Library has: 1998-2004; latest online
Provides one page analyses of 3,500 companies; includes ratios such as return on invested capital for latest 10 years.

*Value Line Investment Survey
HG 4501 V26 Microfilm  (Oct. 1972-1979) and Microfiche (1980-2004)
Latest online.)
Contains six years of financial data and ratios for 95 industries. Also contains up to 16 years of financials for about 2,200 companies. Pages for industries and companies include forecasts out five years. Pages for companies in particular industries are grouped together and preceded by a page on the industry as a whole. Includes beta.

Yahoo! Finance
Company Profile sections include some ratios.

top

Stan Lyle 
lyle@uni.edu
Rod Library
University of Northern Iowa
April 23, 2008