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Entrepreneurship: Ratios, Averages, & Benchmarks

This guide supports UCI’s innovation and entrepreneurship community by connecting users to relevant resources used to conduct research throughout the entrepreneurial process.
URL: https://guides.lib.uci.edu/entrepreneurship

Ratios, Averages, & Benchmarks

S&P Capital IQ 
Access: UCI - Authorized Affiliates
Geography: US & Global
Downloadable public company ratios and valuation multiples, going back several years. Data available in both quarterly and annual increments.


​PitchBook
Access: UCI - Authorized Affiliates
Geography: US & Global
Public company profiles include ratios and multiples going back several years. Data available in both quarterly and annual increments.

  • Company Profile > Financials > Ratios
     

Value Line Investment Survey 
Access: UCI
Geography: US
​Research and recommendations on approximately 1,700 stocks, including ratios used for valuation.

​IBISWorld
Access: UCI
Geography: US
Industry ratios, organized by NAICS code in the US Industry Reports, are available for the current year and the last three years. Data is from the RMA's (Risk Management Association) Annual Statement Studies.​

Key Business Ratios
Access: UCI
Geography: US
Data from Dun & Bradstreet. Industry ratios organized by SIC code, available from the last four years.

Financial Ratios
A ratio is calculated from two or more figures, usually taken from the financial statements of a company, in order to provide an indication of the financial performance and position of that company. Ratios may be expressed:

  • as a percentage (e.g., return on capital employed)
  • in days (e.g., debtor collection period)
  • as a multiple (e.g., rate of turnover)

Ratios may also be calculated over a period, so as to enable an analysis of trends to be formulated, or compared to other similar companies or industry averages.

Sources: 
A Dictionary of Accounting - "Financial Statement Analysis" (Access: UCI)
A Dictionary of Business and Management - "Accounting Ratio" (Access: UCI)

Other Ratios
Every department in every business produces some kind of information that can be used by its manager to measure performance. This information may be related to operational considerations within the department, the financial condition of the entire company, or the performance of a company's suppliers and customers. 

Source: Business Ratios and Formulas: A Comprehensive Guide (Access: UCI)

Ratios vs. Averages vs. Benchmarks

The words ratios, averages, and benchmarks are sometimes used interchangeably. 

  • Benchmarks: basically, the practice of comparing your company's performance against the average performance of competitors in the same industry.
  • Averages: basically, the data that results from the averaging (i.e., calculating the mean), of any given ratio(s), across multiple companies operating in the same industry.
  • If you know the averages for your industry, you can benchmark your company's own ratios against your competition. 

Ratio Formulas

Can't find a ratio?

  • Hundreds of ratios exist to describe all nuances of a company's activity. 
  • Databases usually only feature a couple dozen of the most popular ratios. 
  • You may need to manually calculate a ratio if you don't see it in a database's ratio list. 

Try the eBook Business Ratios and Formulas: A Comprehensive Guide (Access: UCI) to find formulas.

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