16. Almanacs
Description of Publication: Almanac of Business and Industrial Financial Ratios
Dr. Leo Troy, author of the Almanac of Business and Industrial Financial Ratios, is a distinguished professor of economics at Rutgers University and has written the widely praised Almanac for more than 20 years.
To the users of financial and operating information-accountants, bankers, business managers, investment and management consultants, lawyers, credit executives, and trade association executives-the Almanac gives the answers to such practical and searching questions as: Compared to the industry as a whole and also to corporations of similar size, how well is the company I am now studying performing in its ratio of profit to sales? On net worth? What about costs? What percentage of sales goes to pensions and other benefit plans? How do the company's outlays on compensation of officers, rents, interest, repairs, and advertising compare with the competition? What about internal sources of capital? What share of sales is going to amortization, depreciation, or depletion? And what percentage of net income is held as retained earnings?
Based on the industry's record, the analyst can then ask, are the company's capital allocations in line with competitors? The Almanac provides answers to these questions and many others based on corporate activity in the United States as reported in their respective accounting periods and for the most recent year for which authoritative figures derived from tax return data of the Internal Revenue Service are available.
The Almanac profiles corporate performance in two analytical tables for each industry. The first table reports the operating and financial information for corporations with and without net income. The second table provides the identical information as the first, but only for those corporations that operated at a profit.
The financial statistics are generated by the U.S. Internal Revenue Service. Computers tabulate the total dollar value of business tax returns line by line. Dr. Troy uses this aggregate data to calculate figures in common size and ratio form (see Chapter 4). The publication appears annually, but there is about a three-year time lag before the IRS data are available. According to Lavin's book, Business Information, other weaknesses of the Almanac are also a direct consequence of using IRS data. Industry breakdowns are less detailed than those in the RMA Statement Studies and from D&B; plus only 180 SIC codes are listed.
Dr. Troy's publication does offer some significant advantages. Data from income statements are more detailed than those found in most other resources. For example, common size analysis for rent, advertising, interest, and other specific expenses are given. Figures are divided into 12 asset-sized categories, plus totals for all companies. In addition to the common size analysis for income and expense items, 10 ratios are calculated. For students doing financial analysis, the availability of these ratios is essential.
www.simonandschuster.com
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Almanac of Business and Industrial Financial Ratios
annual publication
For more information, call: Prentice Hall,
Phone (201) 263-7000
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