SPREDGAR Standard Graphs
and SIC Comparable Data
SPREDGAR
computes three standard graphs, plus a summary graph, that compare key
financial ratios to benchmark ratios for the same Standard Industrial
Classification (SIC) code.
The first
graph shows profitability, in this case Google, Inc. (symbol GOOG) for the
quarter ending March 31, 2007. Each profitability metric is compared against
its peer group, "Information Retrieval Services (SIC code 7375) which contains
125 companies:
We can tell at
a glance that Google is doing better than its peer group. Note that a number
of the returns (such as ROE) are stated on a quarterly (not annual) basis, so
the annualized number may be four times as large if this is an average
quarter.
The next graph
shows liquidity, or Google's ability to meet its short-term obligations:
Google is obviously quite liquid: It's current ratio
(current assets divided by current liabilities) is quite high compared to its
peer group, receivables are turning over more rapidly, and most assets are
current as opposed to fixed. It also requires less working capital than its
peer group.
Finally we look at debt and miscellaneous ratios:
In this case
Google has almost no debt, and thus the "Times Interest Earned" value is
enormously large, so we uncheck the "Show large values" box to make the graph
more readable. Google is doing quite very well in this area also.
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.
Spredgar Software's
mission is to
provide
unbiased financial investment data through Excel
add-in software for the
private investor, the professional analyst, and the academic.
