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Business ReferenceBeth Kaylor -- Faculty Development -- October 31, 2008
Public, private or non-profit
Private is less than 300 shareholders The majority of companies are private –
about 98% To quotes Forbes: “Private means private!” No reporting requirements Little information is available If a public company chooses to “go private”
the old filings will remain available through the SEC
What can you find for private?
Hoover's Handbook of Private Companies – Reference HG4057 .A286213
Databases– BSP– ABI– Mergent
Local business journals Secretary of State (required filing)
Non-profit organizations
More of an industry than a category of “company.” Very little information available about the financial
operations Don’t have required government filings
– Chairman of the Board letter – Description of the charity, causes, actions,
accomplishments, etc. of the organization – Directors and Officers – Financial statement
CPA Opinion letter, Income statement, Balance sheet, footnotes
Databases?
Databases
SIC and NAICS
SIC– Standard Industrial Classification– Last updated in 1987– New technologies do not fit
NAICS– North American Industrial Classification– Same number across countries – last four
change
SIC and NAICS
Hierarchy Where to find them Easy? Mergent or BSP Census Bureau webpage C Manual -Ready Ref HF1042 .N67 2007 Conversion – Census Bureau C
– No search for SIC and NAICS 2007 – have to use 2002
– Ohio Labor Market Crosswalk O
Resources for Financial Ratios
3 main sources for industry ratios Shelved together in Reference Each gets their information from different
sources Numbers will be different but can be used
together to get a complete picture of the industry
Grouped by product code
RMA Annual Statement Studies
Reference HF5681.B2 R6 Contains composite financial data on
manufacturing, wholesaling, retailing, service, and contracting lines of business.
comparative data Comes directly from the financial statements
of small and medium-size business customers of RMA’s member institutions
Industry Norms and Key Business Ratios
Reference HF5681.R25 I53 Dun and Bradstreet Line of Credit business reporting Helps one understand the true performance
of a company, by benchmarking it against its industry peers
14 key business ratios cover all critical areas of business performance—solvency, efficiency and profitability
Almanac of Business and Industrial Financial Ratios
Reference HF5681.R25 T68 Provides financial ratios for companies in
various asset ranges by SIC code Data reported are based on aggregate
numbers from IRS records.
Other Ratio Sources
Mergent Business Source Premier Lexis-Nexis Academic
Ratios? What do they mean?
Liquidity ratios– Most commonly used– Show the ability of the organization to quickly
generate cash Current Ratio – current assets/current liabilities Quick Ratio – same as above but subtracts inventory
from current assets How well can an organization meet its short-term
obigations
Ratios? What do they mean?
Efficiency Ratios determine how efficiently a business uses its
assets, and where there's room for improvement
Inventory turnover, asset turnover etc…
Ratios? What do they mean?
Profitability Ratios assess the profitability of a business and
changes in its profit performance These ratios are probably the most important
indicators of a business's financial success.– Gross profit margin– Net profit margin– ROA – return on assets– ROE – return on equity
Ratios? What do they mean?
Solvency Ratios designed to help one measure the degree of financial risk
that a business faces "Financial risk," in this context, means the extent to which
the organization has debt obligations that must be met, regardless of cash flow.
assess the level of debt and decide whether this level is appropriate for the company– Debt to Equity– Debt to Assets– Coverage of Fixed Costs– Interest Coverage
Company Analysis
Public or private? Start with Mergent and then BSP Corporate affiliations Value Line Lexis-Nexis Send them to me
Industry Survey
Standard and Poor’s NetAdvantage– Or print Industry Surveys– Reference HC106.6 .S74
IBIS World Business Source Premier ABI Statistical Universe Send them to me
Business Plans
What is a business plan? Why write one? Many resources in Reference and General
Collection SBA Small Business Planner - SBA My Own Business M SCORE S
Corporate Affiliations
Lexis-Nexis Corporate Affiliations– Who owns whom– HG4057 .A219 – 2006 v.1-8; Current 1 year in Ready
Reference, previous 1 year in Reference, and earlier volumes in the General Collection
– Most recent is 2008
SBBI Databook
Stock Bonds Bills and Inflation Yearbook– REF HG 4501 .S7949 2007– History of the returns on the capital markets
in the US 1926-2006– Includes
Large and small company stocks Long term corporate and government bonds Intermediate term government bonds US T-bills Consumer Price Index
Questions?