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) Secretary of State

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 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 CC  Manual -Ready Ref HF1042.N67 2007  Conversion – Census Bureau CC – No search for SIC and NAICS 2007 – have to use 2002 – Ohio Labor Market Crosswalk O 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 - SBASBA  My Own Business MM  SCORE SS

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?