Industry Norms and Key Business Ratios

Recommended supplement

This publication is very similar to the RMA publication except it costs a lot more and has 800 industry groups, approximately twice that of the Annual Statement Studies. It is the product of D&B's unique database of credit reports and draws on the financial statements of more than a million companies. It is used to evaluate the financial performance of companies against averages in their own industries, such as profit to sales, and for comparing one industry to another on many items, such as return on investment. D&B calculates 14 ratios, while RMA provides 16. An important difference is that, although median and quartile figures are presented, data are not grouped by size of company, and no historical information is provided. In addition to common size analysis, D&B calculates a "typical balance sheet and summary income statement" for each industry by multiplying the common size percentages by the median total assets and sales for that industry group. The common size presentation of income statement data is much briefer than for balance sheet items.

In addition to the desktop edition described above, D&B also sells more detailed ratio data to commercial customers. Various formats offer breakdowns by asset size, geographic region, and time period. Each can be purchased in printed format or on floppy disk. Industry norms from D&B also appear in several other products. Selected company and industry ratios are presented in several of D&B's more specialized credit reports. The on-line reports typically cite eight industry norms and four key ratios for every company.

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Industry Norms and Key Business Ratios

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