The purpose of the project is to use resources available to obtain industry averages for commonly used ratios. Additionally, you will compare company ratio results to industry averages.
- 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.
- Obtain industry averages for commonly used ratios in the current period. Industry average information is reported by industry title or SIC code.
- Look up the following industry-average ratios:
Gross profit margin
Times interest earned
Accounts receivable turnover
Return on Sales
Return on Assets
Return on Equity
Note that some industry averages may not apply to your company.