| page 2 Now that we know our company’s SIC and NAICS numbers, in the next section we will explore how to use the Internet to find sector financial performance data, statistics, and information. 3. Finding Sector Financial Performance Data, Statistics, and Information. An impressive database for use as a company financial performance benchmarking source is the US Census Bureau quarterly financial report database, accessible at www.cenus.gov/csd/qfr. At the bottom, and on the left, clicking on Publications and then Documents, brings you to a page from which you can download the quarterly financial reports. The most recent quarterly report available is for January to March 2003, so the data is recent. Data in this report is based on information that the Census Bureau receives from companies using a survey sent to the companies. The financial statement data is accumulated and presented by sectors. What makes this database so potentially useful is that many useful financial ratios are provided for about 35 sectors in the report, a relatively large selection of sectors to choose from. One of the sectors, for which such accumulated financial ratio data is provided, is motor vehicle and parts. The sector – motor vehicles and parts – probably covers a wide variety of products and companies. Venture Industries may not prefer to compare it results to all the companies included in the database that makes up the accumulated data in the Census Bureau’s motor vehicles and parts sector. Nevertheless, the data probably does represent a fairly close sector (group of companies) to Venture Industries’ group of companies it would prefer to benchmark against. This database is likely as good a database as is available on the Internet. We have, with these quarterly reports, recent, relevant data, which Venture Industries can quickly gain access to and compare itself. Ratios provided include, as a percentage of total sales: profits; depreciation expense; income from operations; interest expense; and income before tax. Working capital and return on equity and assets ratios are given. Several other income statement and balance sheet ratios are given. At this Census Bureau site, www.factfinder.census.gov/servlet/BasicFactsServlet?_lang=en, clicking on Business and Government, will take you to financial performance data for many industrial sectors and sub-sectors, including NAICS code 336399, All Other Motor Vehicle Parts Manufacturing. A lot of financial performance data can be found at this site, however some of the data is from around 1997. The Census Bureau also publishes what they call Current Industrial Reports. These reports are published periodically and are based on survey data collected form companies. The focus of these reports is data on production and shipments of products. The reports are issued to cover NAICS sectors. A list of the reports issued to date is at www.census.gov/cir/www/ind_num.html. Data in these reports provide price per unit information for NAICS sectors. Unfortunately, very few NAICS sectors have reports. The Canadian Government maintains a website at www.strategis.ic.gc.ca/sc_ecnmy/sio/homepage.html, from which you can get sector information for Canadian companies, with sectors based on the NAICS classification scheme. Unfortunately, searching through this site, I am not able to find useful financial statement performance data against which a company could benchmark its performance. There is performance data available, but it is mostly related to sector operational performance, rather than financial performance. A very useful site for financial performance data on smaller companies is www.bizstats.com, maintained by Patrick O’Rourke. Patrick O’Rourke uses mostly government sources for the data that is presented. A lot of the data is from the Internal Revenue Service (IRS), a valuable source of data for smaller, privately owned companies. The IRS provides this data from tax returns in aggregate form, by broad business type. A lot of ratio information is provided at the O’Rourke site. The caveats provided about the use of the data should be read. The Internal Revenue Service makes available on-line a tremendous amount of aggregated financial performance data for companies in many size categories and in broad business types. From this data, important financial performance ratios can be computed. This is an important source of information for smaller companies interested in comparing their financial performance with other companies similar to them in size and function (e.g., manufacturing or construction). Usually the data is a couple of years old when released. The IRS site to start looking for this data is www.irs.gov/taxstats/index.html. Although (as suggested above with the comment on caveats by O’Rouke) this is data that should be carefully analyzed and understood to insure sufficient understanding of how it is presented (because the data is from tax returns), the data is so accessible on the Internet, the effort to do this analysis and use the results could lead to very valuable benchmarking data. The IRS database may be the only easily accessible database on the Internet that provides detailed, reliable financial performance data on smaller companies. Yahoo maintains a site at biz.yahoo.com/p/sectors.html that provides a few, key financial performance ratios for industrial sectors and sub sectors. For example, ratio data is given for the Auto & Truck Parts sub sector under the sector Consumers Cyclical, and the same data is given for a few dozen individual companies that are assigned to the Auto & Truck Parts sub sector. This Yahoo site data, which probably is based on SEC filings, should agree, more or less, with the financial ratio data on the Census Bureau’s quarterly financial reports. Material differences should be explained. So far the databases identified in this section, which can be accessed on the Internet and from which we can obtain financial performance information, are, for the most part, government databases, aggregated into sectors. These sectors are a group of pre-defined companies. The make-ups of the sectors are not always the same from database to database, even though the sector description may be similar, and for the most part, we do not know the exact identity of the companies that make up these sectors. Our management accountant, who we have assumed works for Venture Industries, can create his or her own sector (group of companies), for which reliable, recent financial performance data can easily be obtained and aggregated. This has the advantage of having financial performance measurements for groups of companies that are of most interest and most relevant to Venture Industries. For example, Venture Industries gives its US or Canadian, SEC or Canadian Securities Administration, registrant competitors as Johnson Controls, Lear, Visteon, and Magna Internatianal. Because these companies must provide accurate financial performance data quarterly to the SEC, or in the case of Magna, a Canadian company, to the Canadian Securities Administration, our Venture Industries management accountant can easily access this provided data at www.sec.gov/edgar/searchedgar/companysearch.html and www.sedar.com/homepage_en.htm. The SEC has a service in which the SEC will send an e-mail notification when a designated company has filed its 10-Q quarterly financial statements. With the availability of the quarterly SEC filings, a company can, on a continuing basis, benchmark its financial performance against the performance of a “tailor-made “ group of companies. The only limitation is that the companies in the group make SEC filings. Sites identified in this section have the mission of providing sector (and company in the case of the SEC and the Canadian Securities Administration) financial performance data to the public, and to do so without fees. Furthermore, these sites are, for the most part, government sites that get their data directly from companies. It is sites in this section that should provide you the best accessibility to the most relevant sector and company financial performance data. next page |
| Finding Industry Sector Information |