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:

  • D&B Business Browser: Search by company name or ticker symbol and click on Valuation in the left margin for company, industry, sector, and S&P 500 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.

Library Databases and Print Resources

Almanac of Business & Industrial Financial Ratios (Print Resource)
Provides financial ratios for companies in various asset ranges by NAICS code. Data reported are based on aggregate numbers from IRS records.
Call Number: Business Library Reference Collection HF5681 R25 T68

D&B Business Browser (Dun & Bradstreet)
Formerly OneSource Global Business Browser. Provides robust intelligence on companies, executives, and industries, as well as news, analyst reports and SEC filings. Use the search boxes on the database homepage, or use the menu tabs to build custom lists or search for analyst reports by brokerage house, company, or industry.
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only. Licensed for 10 simultaneous users.

Factiva (Dow Jones)
Newspapers, trade and scholarly journals, TV and radio transcripts, and news wires from more than 200 countries in 26 languages. Information on publicly traded companies, industry ratios, trade associations, and relevant news articles is under the Companies/Markets tab. (Updated daily, dates vary by title)
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only. Licensed for 3 simultaneous users.

IndustriusCFO Industry Metrics
Industry benchmarks for more than 2,000 industries down to individual counties and metropolitan areas. Median company income statement and balance sheet metrics, and financial ratios in liquidity, profitability, and asset efficiency. Choose the 1-year report for small, medium, and large company size metrics, or the 4-year report for longitudinal analysis with cash flow.
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only.

Industry Norms and Key Business Ratios (Print Resource)
Arranged by SIC code, provides financial norm and business ratio data developed from actual company income statements and balance sheets.
Call Number: Business Library Reference Collection HF5681 R25 I5

Mergent Online
Database of over 10,000 U.S. public companies, over 18,000 international companies, and over 8,000 “dead stocks.” Country reports, custom reports and screening capabilities are also available. Up to the most recent 15 years of data, and up to the most recent 10 years of annual reports. (Updated Monthly)
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only.

RMA Annual Statement Studies (Print Resource)
Contains composite financial data on manufacturing, wholesaling, retailing, service, and contracting lines of business. Arranged by NAICS code, this work makes it possible to compare one company’s performance relative to other companies in the same line of business.
Call Number: Business Library Reference Collection HF5681 B2 R6