How to Use the Industry Average/ Ratio Table ?
USBR (U.S. Business Reporter) uses a basic averaging method to determine the business norms and industry averages for all industries. We do not compile a list of all companies within an industry. USBR takes a sample of companies based on their main business activity instead of just looking at their SIC number. Since different industry players can be in multiple lines of business,an SIC analysis would not give a precise depiction of business norms and industry averages. USBR painstakingly looks at each company and compares their main business to similar industry companies to develop a sample size with accurate and approximate industry averages.
USBR divides its analysis of industry averages into three separate quartiles as follows:
- Lower Quartiles (LQ)
- Middle Quartiles (MQ)
- Upper Quartiles (UQ)
Information is categorized by SIC/PSIC number which is the number the company identifies as its main business line. However, many companies are in multiple products and markets which may not give the reader an precise reflection of industry norms and ratios.