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Financial Ratios

Posted: Jul 2, 2015

Rensselaer Only indicates a resource for which access is restricted to current Rensselaer students, faculty and staff, and walk-in users of the Libraries. Accessing databases off-campus requires using your RCS ID and password to log in.



Introduction Up Arrow


Interpreting Ratios Up Arrow

In addition to listing industry ratios, the following books also include guidelines for interpreting ratios:

See Preface of either RMA Annual Statement Studies and/or Industry Norms & Key Business Ratios.

  • Industry Norms & Key Business Ratios
    Ref Reserve HF5681 R25 I52x (Service Desk, Folsom Library) Current 3 years at Service Desk; Earlier editions on the 3rd floor, Folsom Library.
  • RMA Annual Statement Studies: Preface
    Ref Reserve HF5681 B2 R6x (Service Desk, Folsom Library)Current 3 years at Service Desk; Earlier editions on the 3rd floor, Folsom Library.

Company Ratios Source Up Arrow

  • Use Mergent Online Rensselaer Only
  • Enter company name in search box. Click on Search button. Click on Filings tab. Click on Edgar Search link.
  • Click on Company Name or Ticker radio button and enter company name.
  • From Filing Date Search section, select radio button for Last 12 Months. From the Filing Type pull down menu, select 10-K. Click on Search button. Select HTML. Use table of contents to navigate to 10-K, Part II, Item 8.


Calculating Company Ratios: Up Arrow

You will need to know the formulae for industry ratios. You will also need to consult a company's "consolidated financials" to calculate a specific ratio for a company.

Formulae for Ratios


Quartiles Up Arrow

For ratios expressed as quartiles, please consult these books:

  • RMA Annual Statement Studies Ref Reserve HF 5681 B2 R6x (Three most current years - Service Desk, Folsom Library) Earlier editions on the 3rd floor, Folsom Library
  • Industry Norms & Key Business Ratios Ref Reserve HF5681 R25 I52x (Three most current years - Folsom Library, Service Desk) Earlier editions on the 3rd floor, Folsom Library.

Figures in the ratio tables are broken down for all companies sampled into:

  • Median - the midpoint of all companies sampled.
  • Upper Quartile - the mid-point of the upper half of the companies sampled.
  • Lower Quartile - the mid-point of the lower half of the companies sampled.

Please note:

  • Upper quartile figures represent the best condition for any given ratio.
  • Upper quartile figures are not always the highest numerical value.
  • Lower quartile figures are not always the lowest numerical value.


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