Value & Strategy

Home » Financial Analysis » Financial Analysis Lab: a treasure chest for analysts

Financial Analysis Lab: a treasure chest for analysts

At Georgia Tech professor Mulford has made available some great resources.

The spreadsheets with trailing data for various industries can help you back-up your valuation assumptions or provide benchmarking data.

Why do industry averages matter?

The pervasive effect of reversion to the (industry) mean is stronger than many good competitive positions as barriers to entry tend to get broken down. On the positive side, terrible businesses generally get a break when better management comes in. Terrible industries profit when raw materials become cheaper or technology makes capex less burdensome. As a result both negative and positive ROIC’s tend towards their cost of capital.

Extrapolating a firm’s current margins and asset turnover is a capital mistake.

Mean reversion

Change in Median ROIC by Quintile (2000 to 2010)

Source:

What can you find?

Per industry data on:

  • Operating cash margins
  • Free cash margins
  • Net margins
  • Capex/revenue
  • Cash as % of revenue
  • SGA as % of revenue
  • Cash cycles
  • Receivable cycles
  • Etc.

Follow the link, use and enjoy!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow Value & Strategy on WordPress.com

Follow me on Twitter