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QUESTION

Obtain the four-digit primary SIC (Standard Industrial Classification) Code and industry title for your company. Record the primary SIC code and industry title at the top of the Ratio Analysis Workshe

  1. Obtain the four-digit primary SIC (Standard Industrial Classification) Code and industry title for your company. Record the primary SIC code and industry title at the top of the Ratio Analysis Worksheet.
  2. Obtain industry averages for commonly used ratios in the current period. Industry average information is reported by industry title or SIC code.
  3. Look up the following industry-average ratios:
    1. Current ratio
    2. Debt ratio
    3. Gross profit margin
    4. Times interest earned
    5. Accounts receivable turnover
    6. Inventory turnover
    7. Return on Sales
    8. Asset Turnover
    9. Return on Assets
    10. Financial Leverage
    11. Return on Equity

Note that some industry averages may not apply to your company.

Alternative to Industry Averages:

If you are not able to find the industry average for part 3 of your project, please consider the following:

Unfortunately, some of the websites where you can find industry averages will require you to pay for them. Instead of using industry average, calculate the same ratios for one of the competitors to the company you used in your project. That will give you the comparative information you need for Part 3 of the project. I believe this will help.

  1. Write a 3-5 page report comparing the above ratios to industry averages. Discuss whether your company's profitability, efficiency, liquidity, and solvency are better than, or worse than, its peers. The report should be well written with cover page, introduction, body of paper (with appropriate subheadings), conclusion, and reference page. References must be appropriately cited. Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.
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