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Other Popular Industry Report Series
 Industry Financial Ratios Profile Details: Each Industry Financial Ratios Profile includes three major sections: 24 industry financial ratios, a detailed industry profit and loss statement, and itemized balance sheet benchmarks. Although additional industry financial ratios can be calculated from the report's income statement and balance sheet, the report displays these three-year industry financial ratios: cash flow and solvency, quick ratio, current ratio, current liabilities:net worth, total liabilities:net worth, current liabilities:inventory, fixed assets:net worth, return on assets, return on net worth, return on sales, accounts payable:sales, days payable, working capital turnover, days working capital, assets:sales, days receivables, cash turnover, accounts receivable turnover, inventory turnover, days inventory, cost of sales:inventory, current asset turnover, fixed asset turnover, total asset turnover, cost of sales:payables. Industry Financial Ratios are generally categorized in four ways: · Industry Cash Flow and Solvency Financial Ratios · Industry Profitability Financial Ratios · Industry Efficiency/Turnover Financial Ratios Brief definitions of the displayed financial ratios in each category are detailed below: Industry Cash Flow and Solvency Financial Ratios Current Liabilities:Inventory : Current Liabilities divided by Inventory: A high ratio, relative to industry norms, suggests over-reliance on unsold goods to finance operations. Current Liabilities:Net Worth : Current Liabilities divided by Net Worth, reflecting a level of security for creditors. The larger the ratio relative to industry norms, the less security there is for creditors. Current Ratio: Current Assets divided by Current Liabilities, measuring current assets available to cover current liabilities, a test of near-term solvency. The ratio indicates to what extent cash on hand and disposable assets are enough to pay off near term liabilities. Fixed Assets:Net Worth : Fixed Assets divided by Net Worth. High ratios relative to the industry can indicate low working capital or high levels of debt. Quick Ratio: Cash plus Accounts Receivable, divided by Current Liabilities, indicating liquid assets available to cover current debt. Also known as the Acid Ratio. This is a harsher version of the Current Ratio, which balances short-term liabilities against cash and liquid instruments. Total Liabilities:Net Worth : Total liabilities divided by Net Worth. This ratio helps to clarify the impact of long-term debt, which can be seen by comparing this ratio with Current Liabilities: Net Worth. Creditors are concerned to the extent that total liability levels exceed Net Worth. The impact of long-term debt Industry Profitability Financial Ratios Return on Assets: Net After Tax Profit divided by Total Assets, a critical indicator of profitability. Companies which use their assets efficiently will tend to show a ratio higher than the industry norm. May appear higher for startups and sole proprietorships due to owner compensation draws accounted as net profit. Return on Net Worth: Net After Tax Profit divided by Net Worth, this is the 'final measure' of profitability to evaluate overall return. This ratio measures return relative to investment in the company. Put another way, Return on Net Worth indicates how well a company leverages the investment in it. May appear higher for startups and sole proprietorships due to owner compensation draws accounted as net profit. Return on Sales: Net After Tax Profit divided by Annual Net Sales, indicating the level of profit from each dollar of sales. This ratio can be used as a predictor of the company's ability to withstand changes in prices or market conditions. May appear higher for startups and sole proprietorships due to owner compensation draws accounted as net profit. Industry Efficiency/Turnover Financial Ratios Accounts Payable:Sales : Accounts Payable divided by Annual Sales, measuring the speed with which a company pays vendors relative to sales. Numbers higher than typical industry ratios suggest that the company is using suppliers to float operations. Accounts Receivable Turnover: Sales/Accounts Receivable. Target: at or slightly above industry level. Assets:Sales: Total Assets divided by Net Sales, indicating whether a company is handling too high a volume of sales in relation to investment. Very low percentages relative to industry norms might indicate overly conservative sales efforts or poor sales management. Cash Turnover: Sales/Cash. Target: at or slightly below industry level. Cost of Sales:Accounts Payable : Measures the number of times payables turn over in the course of the year. High measures may indicate cash flow concerns. Cost of Sales:Inventory : Reflects the number of times inventory is turned over during the course of the year. High levels can mean good liquidity or sales, or shortages requiring better management. Low levels may indicate poor cash flow or overstocking. Current Asset Turnover: Sales/Current Assets. Target: at or slightly below industry level. Days Inventory: 365/(cost of sales:inventory): Shows the average number of days of items in inventory. Days Payables: 365/(cost of sales:accounts payable ratio): Reflects the average number of days for each payable before payment is made. Days Receivables: 365/(accounts receivable turnover): Reflects the number of days that receivables are outstanding. Target average or lower. Days Working Capital: 365/(working capital turnover): Expresses the coverage in number of days of available working capital. Fixed Asset Turnover: Sales/Fixed Assets. Target: at or slightly below industry level. Inventory Turnover: Sales/Inventory. This ratio gives a picture of how quickly inventory turns over. Ratios below the industry norm suggest high levels of inventory. High ratios could indicate product levels insufficient to satisfy demand in a timely manner. Target: at or slightly above industry level. Total Asset Turnover: Sales/Total Assets. Target: at or slightly below industry level. Working Capital Turnover: Sales divided by Net Working Capital (current assets minus current liabilities). Ratios higher than industry norms may indicate a strain on available liquid assets, while low ratios may suggest too much liquidity. Target: at or above industry level. Each Industry Financial Ratios profile includes an Annual Average Sales & Income Statement that reflects income statement percentages and dollars for the specific industry segment analyzed (corporate industry-wide or by specific sales class), followed by detailed balance sheet data and financial ratios. Sales are based on reports from more than 18 million US business establishments over the three-year analysis period. Income statements are individually calculated for each industry segment and sales class. Dollar-based sales and other dollar-based data in the report reflect averages for industry segment sales, not total industry-wide averages. As a result, sales levels may vary from year to year, depending on the mix of firms that fall within the selected segment. The Annual Average Sales and Income Statement (including average expenses) includes these line items in average dollar and percentage format for each year covered by the report: Sales, Cost of Sales, Gross Profit, Payroll, Rent, Taxes, Interest Paid, Amortization-Depreciation, Advertising, Benefits-Pension, Other Sales-General-Administrative and Net Profit. The industry Balance Sheet detail includes these line items in average dollar and percentage format for each year covered by the report: Assets include Cash, Accounts Receivable, Notes Receivable, Inventory, Other Current Assets, Total Current Assets, Fixed Assets, Other Non-Current Assets and Total Assets. Liabilities include Accounts Payable, Bank Loans, Notes Payable, Other Current Liabilities, Total Current Liabilities, Total Long Term Liabilities, Total Liabilities, Net Worth and Total Liabilities-Net Worth. |
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