A group of productive or profit-making enterprises or organizations that have a similar technological structure of production and that produce or supply technically substitutable goods, services, or sources of income. (poultry…, the automobile… retail…)
*OL = Indu,endo – within; struus – structure
Government creates Industry Sectors
Government creates SIC/NAICS codes
Industries fall in between the sectors and codes and are made up of:
companies with product or service in common
SIC, NAICS numbers ( which companies assign)
Each financial service has own list of industries: Mergent, Value Line, S&P, D&B, LexisNexis
Industry Sectors “Information” 51511Radio broadcasting 51512 Television broadcasting NAICS or SIC’s “ Broadcasting Industry” Companies
NAICS hierarchic structure Radio Stations 515112 U.S. Industry Radio Broadcasting 51511 Industry Radio and Television Broadcasting 5151 Industry Group Broadcasting (except Internet) 515 Subsector Information 51 Sector Description NAICS Code Example NAICS Level
Find what you think is your Industry Sector http://www.census.gov/epcd/ec02/guide.html
Open window to Economic Census thru www.census.gov
Go to NAICS listing and find one or two 2002 NAIC’s codes for your industry.
Find corresponding SIC number.
Have there been changes in your particular NAICS codes from 1997 to 2002?
What do you do with Industry Information?
Can’t buy stock in Industry
Can’t start an Industry
Can’t buy products from an Industry
What can you do with Industry Information?
Analyze economy – an indicator of development
Analyze key operating ratios between, within industries
Compare company ratios to industry ratio for norms and benchmarks
Use for business to business marketing
Monitor business activity
Discover market share
ratio One value divided by another. The result is representative of the value of one quantity in terms of the other. Financial ratios or indexes are used to evaluate a firm's or an industry's financial condition. Often they are used to judge the investment suitability of a particular company. One firm's ratios can be compared to its own past performance and/or to the performance of the industry as a whole. Financial ratios are calculated from the figures given in the firm's annual financial statement .
price/earnings ratio , quick ratio , loan-value ratio , advertising sales ratio , asset/equity ratio , bid-to-cover ratio , book-to-bill ratio , cash ratio , cash asset ratio , common stock ratio , conversion ratio , coverage ratio , current ratio , debt ratio , debt/equity ratio , exercise ratio , expense ratio , fixed-charge coverage ratio , forward P/E , trailing P/E , PEG ratio , income replacement ratio , members' short sale ratio , mint ratio , net capital ratio , odd lot buy/sell ratio , operating ratio , payout ratio , price to book ratio , price to cash flow ratio , price to sales ratio , put/call ratio , short interest ratio , theta , turnover , constant ratio plan , high-ratio mortgage , multiple , relative volatility , variable ratio write , exclusion ratio FINANCIAL RATIOS
Operating and Financial ratios
Investment – analyze for buying into stocks, etc
Small Business – analyze company or industry
Industry Operating Ratios -gov
Questions about Industry
Size of industry, $ volume, key companies in the industry
What are the SIC or NAICS codes (These help classify and describe industry)
Statistical Abstract of the United States
Standard Industrial Classification Manual (SIC)
North American Industrial Classification System Manual (NAICS)
Market Share Reporter (print) TableBase database
Practice Exercise Statistical Abstract of the United States
Using “Business Enterprise”
(one chart) What are the business receipts for your industry sector? Net Income? Estimated number of tax returns?
Find number of establishments by NAICS, using closest classification #.
Based on the SIC sectors, how does your industry stack up for women, black and Asian & Pacific-Islander ownership?
Using Individual Chapters
Find one really interesting statistic about your industry
Using Labor chapter, for your industry:
What are the employment projections for 2008?
Questions about Industry
Current and future state of industry
Trends and forecasts
Market Share – Who are the dominant players? Why? What size of the market do they own or influence?
What are the key financials that dominate the industry?