Financial ratio industry averages

Meathlass

Hi all,

For an assignment I need to comment on the financial ratios of a company. I've done the calculations for 2 years but I'm looking for the industry averages so I can do a proper comparison (company manufactures butter and other dairy products).

I can't find a useable list anywhere. There's some samples on the CPA website and lots of American stuff online which won't be relevant. Any ideas?

Thanks for any suggestions in advance.

Meathlass

Mods,

Just realised there's an Investments and Markets forum as well. Any chance you could move this thread?

Thanks

littlemiss123

From doing similar assignments myself its fairly unlikely you will find such a list already complied to suit your needs. I'd recommend looking at the 3 closest competitors to the company you are analysing and calculate the ratios yourself then take the average of the 3 as your comparison. (It's worth having a flick through their recent annual statements to see are the ratios already calculated in the notes). It doesn't necessarily have to be an average of every company in the entire industry.

Plus, I found when doing college assignments, calculating the ratios weren't as simple in practice (i.e. Debt/Equity becomes complicated once you start throwing in hybrids such as convertible debt etc). As such, if you calculate all the ratios yourself, then there is a certain level of consistency across the ratios....such as the decision to include/not include something, rather than pulling ratios calculated from different sources. I'm not sure about your specific marking scheme but I know for us, 80-90% of the marks were for the interpretation of what was calculated. So don't get too hung up on the figures themselves, you'll still get the marks if you correctly interpret an incorrect figure if that makes sense!

Good luck!

Meathlass

Thanks littlemiss. Yes, most of the marks are for the analysis and interpretation. Good idea to find one competitor and calculate some of their ratios.