       
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:
 | 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. |
|
|
Yellow. A yellow cell indicates that the ratio is within 10% of the
benchmark. |
|
| 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). |
|
| 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). |
|
| Example. Take
a look at part of WalMart's
ValuStox
Pro 10-K filing as of
12/31/2003:
 | 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." |
|
|
Operating
margin,
pretax and after-tax margins are all within 10% of the benchmark, and thus
merit a "yellow" (OK) cell. |
|
| 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. |
|
Spredgar Software's
mission is to
provide
unbiased financial investment data for the
private investor, the professional analyst, and the academic. Gordon
Gerwig, founder of Spredgar Software, has a B.S. in Electrical Engineering and Computer Science from the University of
California at Berkeley and an M.B.A. in Finance from the University of
California at Davis.
Gordon Gerwig and Spredgar
Software have been written up in
Online
Investing for Dummies,
Online Investing
Hacks, and
in the
Innovator, the U.C. Davis Graduate School of
Management's alumni magazine. Gordon
is an individual investor and a member of the American Association of Individual Investors
(AAII).
He is a CERTIFIED FINANCIAL
PLANNER, a
Licensed International
Financial Analyst (LIFA) , and
is an associate member of the
CFA Institute. He has worked in
financial services as a advisor for Morgan Stanley and American Express. He has
experience in small business lending, valuation and consulting.
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