Sources of Comparative Financial Data - Financial Management

An analyst may refer to a number of sources of financial data when preparing a comparative financial analysis, including the following:

  • Dun & Bradstreet. Dun & Bradstreet (D&B) prepares a series of 14 key business ratios for 800 different lines of business. These ratios are based on the financial statements of some 400,000 companies. D&B reports three values for each ratio —the median, the upper quartile, and the lower quartile. The median is the figure that falls in the middle when individual ratios of sampled firms are arranged by size. The figure halfway between the median and the ratio with the highest value is the upper quartile, and the figure halfway between the median and the ratio with the lowest value is the lower quartile. By reporting three values for each ratio, D&B enables the analyst to compare a particular firm with the “average” (median) firm, as well as with the “typical” firms in the top and bottom halves of the sample. The D&B publication containing the data is titled Industry Norms and Key Business Ratios.
  • Risk Management Association. This national association of bank loan and credit officers uses information provided by loan applications to compile 16 ratios for over 250 lines of business. Like D&B, Risk Management Association reports the median, upper quartile, and lower quartile for each ratio. Data are presented for four categories of firm size. This source is especially useful to the analyst gathering information about smaller firms. The Risk Management Association publication containing the data is titled Annual Statement Studies.
  • Quarterly Financial Report for Manufacturing Companies. The Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC) cooperate in publishing quarterly reports on balance sheet and income statement data of various manufacturing companies. These include analyses of the firms by industry and asset size, along with presentations of financial statements in ratio form.
  • Almanac of Business and Industrial Financial Ratios. This annual almanac of business and industrial financial ratios, based on Internal Revenue Service data, reports 22 ratios for many industries. It also includes the number of establishments in the sampled industry, the number without net income, and the total dollar receipts for each of the 13 size groups into which firms in each industry are classified.
  • Financial Studies of Small Business. This annual publication of Financial Research Associates is particularly valuable for the evaluation of small firms.
  • Moody’s (now called Mergent) or Standard & Poor’s Industrial, Financial, Transportation, and Over-the-Counter Manuals. These contain a large amount of balance sheet and income statement data, as well as other relevant background information about a firm.
  • Annual reports.Most corporations publish an annual report containing income statement and balance sheet data, along with other information of interest.
  • 10K reports. Every widely held firm is required annually to file a 10K report with the SEC. These reports contain income statement and balance sheet data, plus a wide range of other relevant information dealing with the firm’s past and current performance and expected future prospects.
  • Trade journals. These are published by trade associations and contain a great deal of financial and other types of information on member firms.
  • Commercial banks. Banks frequently compile financial reports on selected industries.
  • Computerized data sources. A number of computerized databases are also available to assist in financial analysis. The Compustat database is available from Standard & Poor’s. It contains complete balance sheet, income statement, stock price, and dividend information for several thousand companies, covering a period of up to 20 years. The Compustat database is available in a form for both mainframe computers and microcomputers. Value Line provides summary financial data and forecasts of future performance for over 1,700 firms. The Value Line database is available in both hard copy and on the Internet at www.valueline.com. The Disclosure Database contains complete financial data for over 10,000 firms.

Most of these data sources can be accessed via the Internet at the addresses noted in the margin, although most nongovernmental sources charge a fee for access.


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