       
Color-coded SIC Comparisons of Key Financial Ratios
ValuStox Pro
supports color-coding of each ratio and how it compares with its SIC benchmark.
It makes it easy to tell at a glance how a company is doing with respect to its
peers, and in what areas. Here's how it works:
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Threshold.
Ratios 10% (default) over the benchmark or 10% under the
benchmark are of interest. You may change this threshold using the
ValuStox
Pro
options dialog. |
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Yellow. A yellow cell indicates that the ratio is within 10% of the
benchmark. |
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Green. A green cell
indicates that the ratio is 10% "better" than the benchmark. Usually this
means "higher", although with some ratios are "better" if they are lower (such
as debt to equity). |
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Red.
A
red cell indicates that the ratio is 10% "worse" than the benchmark. Usually
this means "lower", although with some ratios are "worse" if they are higher
(such as debt to equity). |
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Example. Take
a look at part of WalMart's
ValuStox
Pro
10-K filing as of
12/31/2003:
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Gross margin.
WalMart's
Gross Margin is more than 10% less than it's benchmark of
28.0% for SIC 5311 (Department Stores). In this case, 10% of 28% is 2.8%, so
anything under 25.2% merits a "red flag." |
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Operating
margin,
pretax and after-tax margins are all within 10% of the benchmark, and thus
merit a "yellow" (OK) cell. |
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All the rest of the
ratios beat the benchmark, in some cases by a substantial margin. The
SGNA (selling, general, and administrative) ratio is more than 25% less than
the benchmark. So that helps to explain how WalMart can have significantly
lower gross margins, and yet be much more profitable than its peers. |
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