Business Ratios

To perform ratio analysis:

1. Obtain the balance sheet and income statement of the firm, using sources listed in Company Information, and calculate the ratios;

2. Compare the ratios to those of specific competitors (obtain their information from the same sources); or

3. Compare the firms ratios to industry norms or averages.

4. For assistance in calculating and using the ratios consult a guide.

Published Ratios and Norms

Advertising Ratios & Budgets. Schonfeld & Associates, Inc. (Ref HF 5801 .A34 1987/1994)
Provides advertising-to-sales and advertising-to-gross margin ratios for 5850 companies and compares the company's ad-to-sales ratio to the industry's ratio. Data is arranged by SIC code, company name, and budget size. Use to monitor the competition and set advertising budgets.

Almanac of Business and Industrial Financial Ratios. Prentice Hall. (Desk Ref HF 5681 .R25 T68)
Lists 24 key financial ratios for 180 industries based on IRS data.

Business Profitability Data. (Ref HD 2346 .U5 B88 1990)
Covers 294 types of small business, listing source and use of capital, sales and income, profitability versus assets, profitability trend and risks; arranged by type of business.

Industry Norms and Key Business Ratios. Dun and Bradstreet. (Desk Ref HF 5681 .B2 I52)
Covers over 800 lines of business, arranged by SIC code. Presents "typical" balance sheets and income statements for the industry and 14 key ratios for the median, upper, and lower quartiles.

RMA Annual Statement Studies. Robert Morris Associates. (Desk Ref HF 5681 .B2 R401)
Gives current and historical data for 370 industry groups collected from annual financial statements of firms. Data is presented by size of firm in assets and in sales. Lists sources for additional data.

Useful Business Statistics
BizStats.com provides information about ratios and benchmarks and statistics for various manufacturing and service industries.

Guides to Using Ratios

For explanations of the ratios and help in using them to analyze a company's performance, consult the following:

Handbook of Business and Financial Ratios. (Ref HF 5681 .R25 T97 1986)
Explains frequently used business ratios; aids in assessing and interpreting financial data.

How to Read a Financial Report. John A. Tracy. 4th ed. (Ref HF 5681 .B2 T733 1994)

How to Use Financial Statements. James Bandler. (Ref HF 5681 .B2 B285 1994)

The Essentials of Management Ratios. Philip Ramsden. (HF 5681 .R25 R36 1998)

Financial Analysis. Erich A. Helfert. (HG 4026 .H436 2001)

Techniques of Financial Analysis. Erich A. Helfert. (HG 4026 .J44 1997)

Winning Business: How to Use Financial Analysis and Benchmarks to Outscore Your Competition. Rich Gildersleeve. (HF 5681 .R25 G55 1999)

Find additional books by searching in the online catalog under the subject words: ratio analysis

Business Credit Management UK - Business Ratios
British site offering definitions of ratios.

CCH Business Owner's Toolkit - Business Ratios
Provides explanations of liquidity, efficiency, profitability, and solvency ratios.

How to Analyze Your Business Using Financial Ratios
Edward Lowe's PeerSpectives provides information on performing a financial analysis using ratios.

RMA Annual Statement Studies - Definition of Ratios
Provides definitions and explanations included in the printed version of the Annual Statement Studies.

SBA Online Women's Business Center - Financial Ratios and Quality Indicators
Explains key ratios and how they can be used in company financial analysis.

Small Business Ratio Calculators
Bankrate.com provides a brief introduction to ratio analysis as well as calculators for the most common ratios.