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BUSI 3450: Business Forecasting Techniques (Bill Goodman)

What are Industry Ratios?

Determine how a company is performing within an industry.

Industry ratios are standards or averages that similar businesses have in a particular industry. Industry rations provide useful benchmarking information for businesses.

What are Financial Ratios?

Financial ratios provide a perspective of how a company is doing over time by presenting percentages of changes. These percentages facilitate comparisons with other companies and the overall industry to gain insight on a specific companies performance and standing in the market.

Financial ratiors are result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

(from Campbell R. Harvey's Hypertextual Finance Glossary)

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