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36

Minding Your Ratios
 

Two books that list financial norms for industries.
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Want to know why two companies in the same market can have vastly different experiences with lenders? Nowadays much of the answer can be found in how your business compares numerically with its peers. That's why it pays to know the industry norms and to take steps to nudge your financial ratios in the right direction. For years we've been recommending Annual Statement Studies, published by Robert Morris Associates (215-851-0585, $105), to business owners who want to anticipate lenders' questions and put the best spin on their companies' performance. The 800-plus-page book contains financial benchmarks (organized by company revenues) on hundreds of standard industrial classifications.

If you're looking for information on even more industries, check out Dun & Bradstreet's Industry Norms & Key Business Ratios (800-223-0141, $440). Although not as comprehensive as the Robert Morris book (there are no revenue breakdowns), the 1992-1993 Desktop Edition offers useful data on more than 800 industries. For each, it presents 14 calculations (everything from the "quick" ratio to return on net worth) and has comparisons of performance by quartile.

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Last updated: Nov 1, 1993




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