« Indian may be appointed dean at Havard B-School | Main | Carissa's Column: Doing Business / Investment Climate »

July 8, 2005

Carissa's Column: Risk Management Association (RMA)

The spotlight this week is on the Annual Statement Studies®, specifically the Financial Ratio Benchmarks, produced by the Risk Management Association (RMA).

According to RMA’s Introduction to Annual Statement Studies: Financial Ratio Benchmarks, 2004-2005 and General Organization of Content (link below), institutional members of RMA submit financial information obtained from their commercial customers and prospects (over 190,000 statements in 2004-2005). RMA groups the statements by the North American Industry Classification System (NAICS), then creates common size financial statements and calculates ratios within each NAICS code. While this is a very rich resource, RMA itself recommends that these studies be used as “general guidelines and not as absolute industry norms” for a variety of reasons explained in the Introduction to… document.

This resource has long been available in print in the Business and Economics Library (BEL), where you will find volumes for 1933 and 1958-1975 (332 R54S) and 1976-2005 (332 R54s1). If you have access to OneSource (UIUC students, faculty and staff can access it through http://www.business.uiuc.edu/pages/onesource.html), you may be surprised and delighted (as I recently was) to find that the old Industry Norms have been replaced with the RMA studies for 2002-2003; newer studies are still available in print in BEL. In OneSource, you can access the Financial Ratio Benchmarks in pdf through the following path:

Profile: Industry >> [select an industry from the list provided] >> Industry Norms

Associated links:

RMA Homepage:
http://www.rmahq.org/RMA/default.htm

Introduction to Annual Statement Studies: Financial Ratio Benchmarks, 2004-2005 and General Organization of Content:
http://www.rmahq.org/NR/rdonlyres/3374780C-3BAD-4450-B47D-E12A5F34888E/0/DefinitionofRatios_FRB_web.pdf

Sample Financial Ratio Benchmarks:
http://www.rmahq.org/NR/rdonlyres/63F7CACE-6E7E-462A-BD06-67A4B48A6DDA/0/StatementStudies_541611_frb.pdf

Listing of Industries in the Annual Statement Studies®, sorted by NAICS:
http://www.rmahq.org/NR/rdonlyres/38A86FAE-890D-4AA0-B313-18C997E6AE94/0/StatementStudies_Industries.pdf

CH

Posted by neugebau at July 8, 2005 3:10 PM Posted to Carissa's Column