Financial Ratios and Industry Averages : Library Databases and Print Resources
Financial Ratios and Industry Averages
Financial ratios and industry averages are useful for comparing a company with its industry for benchmarking purposes. Some of the most common are:
- Current ratio - current assets divided by current liabilities. It indicates how well a company is able to pay its current bills.
- Quick ratio - current assets minus inventory, divided by current liabilities. It sets a higher standard than the current ratio.
- P/E (price to earnings) ratio - price per share divided by the earnings per share. Generally, the higher the ratio, the riskier the stock.
Database tips for finding ratios:
- Factiva: Click on Companies/Markets at the top of the screen, then select Company and search by company name or ticker symbol. Then on the Company Snapshot page, select Reports then Ratio Comparison Report for company, industry, sector, and S&P 500 ratios.
- IBISWorld: On the Industry Report page, scroll down the left hand side table of contents and click on Key Statistics. That should open a subcategory of Key Ratios.