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Business Reference

Business Reference. Beth 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

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Business Reference

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  1. Business Reference Beth Kaylor -- Faculty Development -- October 31, 2008

  2. 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

  3. 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)

  4. 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

  5. Databases? • Databases

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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.

  12. Other Ratio Sources • Mergent • Business Source Premier • Lexis-Nexis Academic

  13. 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

  14. 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…

  15. 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

  16. 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

  17. Company Analysis • Public or private? • Start with Mergent and then BSP • Corporate affiliations • Value Line • Lexis-Nexis • Send them to me

  18. 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

  19. 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

  20. 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

  21. 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

  22. Questions?

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