How to Analyze a Company and Industry
Public or Private, Parent or Subsidiary
Company Financial Information
Recent Stock Performance
Industry Classifications
Industry Ratios
Public or Private, Parent or Subsidiary
Your first step in analyzing a company is to detemine whether it is publicly or privately-held. Many publicly-held companies are required to report certain financial information to the government and to shareholders; privately-held companies are not bound by these same requirements. So, it is generally easier to find financial information for a public company than for a private one. Once you have determined that your company is publicly-held, you need to figure out whether it is a parent or subsidiary. Financial information for subsidiaries is filed under their parent companies.
To find out whether your company is public or private, and whether it is a parent or subsidiary, use:
LexisNexis. Search on your company's name in the Company Profiles section in the LexisNexis Business category. Information contained in the various sources can help you to determine whether or not your company is publicly-held. Some of the sources will also provide you with primary and secondary SIC or NAICS codes; these will be helpful when you want to compare your company against others in the same industry. The sources generally will provide a ticker symbol, such as MSFT for Microsoft Corp. It is often easier to search for information on a company if you know its ticker symbol.
Company Financial Information
Annual reports to shareholders and other U.S. Securities and Exchange Commission filings, such as the 10-K, are the primary way to find financial information about specific companies. Financial information for those publicly-held companies that must file with the SEC is generally available in the following databases:
LexisNexis. The Company Financial Reports section in the LexisNexis Business category features repackaged financial information, such as Disclosure Reports. These reports are produced by third parties, but the information contained in them is largely drawn from SEC filings.
LexisNexis. The SEC Filings and Reports section in the LexisNexis Business category features SEC 10-K Reports and SEC Annual Reports to Shareholders, as well as other types of SEC filings.
S&P NetAdvantage. S&P NetAdvantage provides access to a variety of reports that describe and analyze a company's financial performance. After finding your company in the database, look under the Vital Statistics category for the section Financials. This section provides recent financial information for a company, and also provides basic financial ratios. These ratios can be useful in comparing your company's performance against its industry competitors.
EDGAR. Publicly-held companies are required to file financial information with the U.S. Securities and Exchange Commission. The SEC's EDGAR database provides public access to all required filings, including the 10-K Report.
Recent Stock Performance
S&P NetAdvantage. After you have found your company in the S&P NetAdvantage database, look under the Company Profile category for the section Quote; this provides recent information on stock performance. For more in-depth information on stock performance, choose the Stock Reports category.
Yahoo! Finance. This public Web site provides real time information on stock performance.
Industry Classifications
In order to compare your company's financial ratios against those of other companies in the same industry, you need to determine the SIC code for that industry. The primary SIC code is generally included in many of the LexisNexis Company Profiles sources noted above. The SEC 10-K Report also provides this code.
Standard Industrial Classification (SIC) . This search tool is provided by the Occupational Safety and Health Administration (OSHA). The tool lets you search by keyword. You can also browse the entire SIC Manual.
North American Industry Classification System (NAICS) . This page is maintained by the U.S. Census Bureau. You can search NAICS by keyword or browse the entire manual. There's also a tool for matching NAICS with SIC. The newer NAICS sytem can be useful when searching for information. (For example, you can search on a NAICS code but not on a SIC code in the S&P NetAdvantage database.)
Industry Ratios
Now that you have found the SIC and NAICS codes for your company's primary industry, you can begin to compare your company's financial ratios against those of its industry competitors.
To obtain copies of industry ratios for specific SIC codes, you will need to contact the OCLS Document Delivery Office at 1-800-274-3838. Ask to obtain copies of industry ratios for your specific SIC code from the following 3 sources:
RMA Annual Statement Studies. Call number HF5681.B2 R6.
Industry Norms and Key Business Ratios. Call number HF5681.R25 I525x. (Also known as Dun & Bradstreet's)
Almanac of Business and Industrial Financial Ratios. Call number HF5681.R25 T68. (Also known as Troy's)
In addition to these print sources of industry information, you can also use:
S&P NetAdvantage. After you have found your company in the S&P NetAdvantage database, look under the Industry Surveys category. This category links to S&P industry reports that are associated with your company's primary SIC or NAICS code. For example, Microsoft Corp is linked to the Computers: Software survey. Each survey contains a Comparative Company Analysis section; this section provides different ratios (balance sheet, profit, equity, etc.) for specific companies in a particular industry.
