Compare the profitability metrics of two comparable companies
Compare the profitability metrics of two comparable companies (e.g.: UPS and FedEx) in terms of industry norms
Answer
- Use UTSA subscription database Key Business Ratios Online (Mergent) (see the link below)
- On top of this database Home page > first select the tab “Ratios”> then select its sub-tab “Profitability”
- From “SIC” dropdown menu, select one SIC category into which the company of your interest falls
- For company UPS, you can select: SIC 42 - Motor Freight Transportation > get a table containing three data points of industry norms for SIC 42 - Motor Freight Transportation as follows: Return on Sales (%), Return on Assets (%), Return on Net Worth (%)
- For company FedEx, select SIC 45 - transportation by air, you should get the different figures for SIC 45 under the same category of profitability metrics as for SIC 42.