We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

How Are Industry Ratio Averages Found?

By Patrick Lynch
Updated Jan 22, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

One of the main purposes of industry ratio averages is to help investors decide if an organization is worth investing money in. To find these figures, get the industry code whose discovery depends on the country. Then find the requisite website and enter the keywords of the industry that is being analyzed. Ratio books can be found in libraries or a country’s census department. Finding these averages is a complicated process and involves taking data from various aspects of an organization such as tax returns and other sources.

Industry ratio averages are used to compare the performances of organizations against the industry’s average figures. For potential investors, this is important data because it helps them decide if a company is worth investing in. Business students are often asked to look at industry ratio averages as part of an undergraduate examination.

The first step in finding the ratio averages is to locate the industry code. Methods of discovering this code varies depending on the country. In the U.S. for example, the North American Industry Classification System (NAICS) is used.

Industry ratio averages are normally found in groups of NAICS codes. When looking for American averages, go to the NAICS website and type in the relevant industry keywords. Be careful when typing in the code. The last three digits can make an enormous difference.

Look for ratio books in a library. Again, these books depend on the country. High quality libraries should have some form of a ratio book with universities usually having all versions.

Check the ratio book for the specific industry that is in question. If it is impossible to find ratio books, go online and search for free industry ratio average information. The census agency of most nations will have a certain amount of statistics relating to employment and payroll figures. This information should be reasonably up to date because the census department usually collects the data on a regular basis.

Industry ratio averages are necessary for entrepreneurs who are considering opening a new business. They can help a business owner calculate their potential profit. Simply look at the ratios of companies which are in the same industry and are of a similar size.

The ratio sources collect data regards dozens if not hundreds of financial parameters. These can then be reported in ratio and average form. Examples of the figures include profit margin and sales to inventory. The data for industry ratio averages are collected from tax returns, bank statements, and a variety of other sources.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.