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Some hints for finding business ratios

Recently, a good number of students have visited the library or contacted us looking for some business information. The students tell us that they need to choose a company and then compare that company's financial information to the industry average. Students can do this in a few ways. Here are two of them:
  • They can use Industry Norms and Key Business Ratios. The call number for this series of books is HF 5681 .R25 I 525, and they are kept in the library's reference area. These volumes contain ratios for many industries, which you can look up by SIC Codes. However, the books do not list all industries.
  • Students can also use the Mergent Online database. Find Mergent on the library's website by clicking on [Databases by Subject]. From there, click on the link for [Business and Technology]. Finally, click on [Company Information]. Mergent is on that list. Once on Mergent's front page, click on[Enter Mergent] to get to the database itself. The following steps then are to make a custom comparison report.
    1. Start by finding the company's SIC or NAICS code by doing a search on the Company Name or Ticker Symbol. Just type the name of the company, or the ticker symbol if you know it, on the small search box.
    2. Return to the main Mergent search screen and do a search on the SIC or NAICS code using the "2 Classification" section. If you are only interested in searching for companies on the US exchanges, click on the checkbox next to "US exchanges only" located below the company search box.
    3. Click on the option that says [Click Here to Add all companies from this search to add all the companies from this search (excludes private company results)]. right above the list of companies. The companies will now be added to the Company Analysis List.
    4. Towards the upper right of the screen you should see a section that reads [Company Analysis List (expand).] If you hold the mouse over expand, the list of companies will popup along with some options. Click on the [Create Comparison Report] link.
    5. A pop up window will appear with all of the companies checked. In the second section, choose a Category, then a Sub-Category, and then click on the [Add Report Item] button. Add as many items as you need.
    6. If necessary, choose the years that the report needs to cover.
    7. **IMPORTANT** Click on the checkbox next to "Include average in heading" which appears below the list of report items.
    8. Click on the [Create Report] button at the bottom. Another window will pop up with the financial information you requested for each of the companies listed. Above the numbers for each category is the peer average.
If you need to know more about SIC Codes, you can look them up on this site from the Department of Labor here. You may also come across NAICS Codes; find them at the Census Bureau, which also has a tool if you need to convert SIC Codes to NAICS and back, go here.
Published by root on 13 Nov