Guides: Accounting: Financial ratios

Why are financial ratios important?

A company's financial ratios can be found on its income statement or balance sheet. Financial ratios quantify a company's operating efficiency and profitabililty. Aggregated financial ratios enable you to find out how a company's financials compare to similar companies in an industry classification. Industries are classified by specific numeric codes, SIC and NAICS. The SIC (Standard Industrial Classification Code) codes and NAICS (North American Industry Classification System) codes are used by the government to classify businesses for the purpose of collecting and distributing aggregate economic data.

Benchmark industry financial ratios are available in the Library's Mergent Key Business Ratios database.

Mergent Key Business Ratios This link opens in a new window
Provides immediate online access to competitive benchmarking data compiled from D&B's database of public and private companies.

(NAICS) North Atlantic Industry Classification System
The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. NAICS was adopted in 1997 to replace the Standard Industrial Classification (SIC) system
Standard Industrial Classification (SIC) Manual
Access detailed information for a specified SIC, Division, or Major Group; and browse through the manual structure

Accounting

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Why are financial ratios important?

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